AST SpaceMobile (NASDAQ:ASTS) shares fell about 3% in early trading on Friday after Barclays downgraded the satellite communications company two notches — from Overweight to Underweight — and set a price target of $60. That target implies a sharp downside from its previous closing price of $89.50.
The downgrade from analyst Mathieu Robilliard comes despite a string of encouraging developments for AST SpaceMobile. These include plans to begin launches of its next-generation Blue Bird 2 satellites in 2025, the signing of a final agreement with Verizon Communications to provide direct-to-device services in the U.S., and successful testing with Bell Canada.
While acknowledging the positive news, Barclays said these developments were already reflected in its base-case assumptions. Robilliard’s upside valuation suggests a fair value of $125 per share, or roughly 30% potential upside, but he argued that a higher weighted average cost of capital (WACC) was warranted given the company’s early operational stage.
The note flagged several key risks. AST SpaceMobile has launched only five satellites to date, and its second-generation models are both significantly larger and unproven in orbit. Barclays also warned of potential delays in the company’s target to launch between 45 and 60 satellites by the end of 2026.
The bank pointed to a few factors that could challenge its Underweight stance, including stronger-than-expected subscriber uptake from T-Mobile US/Starlink direct-to-device services, the possibility of a takeover by a larger satellite company, and the stock’s high short interest of around 16%, which could amplify the impact of any positive catalyst.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
Some portions of this content may have been generated or assisted by artificial intelligence (AI) tools and been reviewed for accuracy and quality by our editorial team.