Morgan Stanley analyst Kristine T Liwag downgraded Joby Aviation, Inc. (NYSE:JOBY) from Over-Weight to Equal-Weight rating and cut the price forecast from $10 to $7.

The aerospace industry, with its intricate global supply chains, faces heightened disruption risks from tariffs, especially given Boeing's ongoing challenges and lingering COVID-19 impacts.

The downgrade reflects the broader macroeconomic outlook presented by the MS US Economics team, which suggests that recent trade policy developments could significantly hinder economic growth.

Furthermore, the MS US Equity Strategy team has pointed out the potential second-order effects of tariffs, which may dampen corporate sentiment and further slow growth.

Given these conditions, the analyst does not anticipate that Joby's shares will outperform in a slower-growth, risk-averse environment.

Nonetheless, Liwag continues to view the long-term prospects for the eVTOL sector positively and sees Joby's advancements toward aircraft certification as encouraging.

The analyst estimates an EPS loss of 18 cents in the first quarter of 2025 and 73 cents for the year.

Price Action: JOBY shares are down 2.99% at $5.84 at the last check Friday.

Read Next:

• Joby, Archer Navigate eVTOL Uncertainty As FAA Delays, Market Shifts Persist

Image: Shutterstock