Strong sales in Piazza Affari on Avio stock, trailing the FTSE Italia All-Share with a drop of 10.6% to 9.46 euros. The shares of the aerospace company discount the failure of the Arianespace VV22 mission, which was carrying two Pléiades Neo satellites into their orbital slots using the Vega C launcher.
“About two minutes and 27 seconds after the Vega C launcher took off, an anomaly occurred shortly after the second stage ignition (Zefiro 40), which led to the premature termination of the mission. Analysis of the mission data is underway to clarify the reasons for what happened,” the company explains in a statement.
In the wake of the news, Banca Akros downgraded the Avio share from Buy to Neutral, cutting the target price from 12 to 10 euros. The mission failure is “clearly bad news” that could lead to a “significant impact” on the stock price in the near term.
“It will take time to understand the causes and implement the remedies, with potential extra costs and delays”, continue the analysts of the investment bank, specifying however that “in our opinion the European space industry relies entirely on Avio’s rockets and the capital and political support is extremely important.”
In light of the strong order book and potentially good news in tactical propulsion, the broker expects the shares to again present a buying opportunity in due time.
Equita Sim confirms the Hold judgment and the target price of 13.7 euros, recalling that the flight “had already been postponed by about a month due to the replacement of a defective component” and adding that “an investigation will be launched by a investigation”.
“This is the first missed mission for the new Vega C after its maiden flight last July. As in the past, we do not foresee liability as the responsibility after the launch lies with Arianespace and the insurance policies cover the costs. However, the risks for Avio consist of: further delays in the production/scheduling of Vega C launches; less bargaining power for future negotiations; non-recurring costs if corrections of the Zefiro 40 are necessary; increase in the cost of insurance policies. The negative impact will only be quantifiable when the commission completes the investigation”, conclude the SIM experts.