In a report published on Tuesday, Morgan Stanley analyst Simon Flannery initiated coverage on Gogo (NASDAQ: GOGO) with an Equal-weight rating and $13.50 PT.
In the report, Morgan Stanley commented, “Secular growth story offset by tech limitations + international competition. Gogo is the market leader for domestic in-flight connectivity, with exclusive rights for air-to-ground spectrum and long-term contracts offering barriers to entry, and business aviation has a proven track record. However, low take rates reflect limitations of the current technology and the company continues to burn through cash during the current investment cycle. While there is significant potential abroad, we believe the playing field is more level – leasing satellite bandwidth presents lower barriers to entry, and competitors already have agreements or trials with international airlines.”
Gogo closed on Monday at $14.
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Posted in: Analyst Color, Initiation, Analyst Ratings