Morgan Stanley Downgrades Gogo, Sees 18% Downside

Morgan Stanley analyst Landon Park downgraded Gogo Inc GOGO to Underweight from Equal Weight with a price target of $14, up from $13, indicating an 18.37% downside, as he assumed coverage of the stock.
Gogo is benefiting from solid industry tailwinds as the dominant private jet in-flight connectivity provider with over 80% market share as the only holder of the licensed air-to-ground spectrum. He expects this to change over the next six months as competitor SmartSky launches service using unlicensed spectrum.
Gogo is yet to price in the competition risk as per Park.
He also expects increased pressure from satellite companies over the next several years.
Given his outlook for weaker net additions beginning in 2023, he added that Park projects revenue growth to decelerate from about 20% in 2021-22 to about 10% by 2023.
Price Action: GOGO shares traded lower by 6.65% at $16.01 in the premarket session on the last check Wednesday.