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Scotiabank slightly lowers AST Spacemobile stock PT amid launch delay

EditorIsmeta Mujdragic
Published 04/02/2024, 10:09 AM

On Tuesday, Scotiabank adjusted its price target for AST Spacemobile (NASDAQ:ASTS), a company focused on delivering space-based cellular broadband services, reducing it to $7.40 from $7.50. Despite this change, the firm maintained its Sector Outperform rating on the stock.

The reassessment by Scotiabank followed AST Spacemobile's disclosure of a delay in the launch of its five Block 1 Blue Bird (NASDAQ:BLBD) satellites. Originally projected for an earlier date, the transportation of these satellites to the launch site is now anticipated to occur in July or August, which indicates a postponement of 30 to 90 days from the prior schedule.

According to the company, this delay is due to issues with two suppliers, which have since been replaced by increased in-house production, boosting the company's vertical integration from 90% to 95%.

AST Spacemobile has also recently announced that it has secured non-binding letters of interest from three institutions. These letters indicate potential non-dilutive quasi-governmental funding, which is often similar to that provided by export credit agencies. Such funding would be utilized to support the launch of the company's subsequent Block 2 satellites.

Despite the delay and the adjustment in the price target, Scotiabank's analyst suggests that the reduction in AST Spacemobile's lead over competitors like Starlink is moderate. The sell-off in the company's shares following the news of the delay seems, in the analyst's view, to be an exaggerated response given the developments.

The analyst's comments and the price target adjustment reflect the latest operational updates from AST Spacemobile and the anticipated impact on the company's timeline for advancing its satellite broadband service capabilities.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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