ViaSat (VSAT) shares are up about 8.5% year-to-date after the recent announcement of a sizeable government award, but competitive concerns related to Starlink and other companies are lingering, Morgan Stanley said Tuesday in a note to clients.

Starlink's "momentum in Aviation -- a historical area of strength for [ViaSat] -- continues to weigh on sentiment" for ViaSat, the investment firm said.

There's also "limited near-term upside" for ViaSat shares due to its "own satellite capacity constraints and the potential for Aviation backlog churn risk as airlines appear to be warming to Starlink," the note said.

The investment firm said it expects ViaSat's Aviation division to "remain in focus" ahead of the company's fiscal Q3 results, which are slated for after the close on Thursday.

Morgan Stanley cut ViaSat's price target to $12 from $26, while keeping the company's rating at equalweight, saying that the "competitive concerns [are] largely priced at current levels."

Price: 9.09, Change: -0.14, Percent Change: -1.52