Please ensure Javascript is enabled for purposes of website accessibility

Virgin Galactic Is Now a Buy With 71% Upside, Analyst Says

By Eric Volkman - May 21, 2021 at 7:13PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A recent ticket auction from a rival enhances the space exploration company's value, UBS prognosticator Myles Walton believes.

Just like its upcoming test flight this weekend, Virgin Galactic Holdings (SPCE -1.48%) stock is positioned for a powerful liftoff. One analyst tracking the stock, UBS' (UBS 0.30%) Myles Walton, upgraded his recommendation on the stock Friday to buy from neutral. That was despite the prognosticator's price target cut; to him, it's now worth $36 per share, instead of $40.

Even with that chop, Virgin Galactic still has significant upside. Walton's new level implies a gain of almost 71% on the most recent closing stock price.

Investors are bullish on Virgin Galactic just now mainly because of that test flight, the scheduling of which was confirmed by the company Thursday.

A rocket launch at night, seen from the ground.

Image source: Getty Images.

Walton is encouraged by this and finds another key reason to be positive on Virgin Galactic. "We think the faster pace of the Blue Origin offering commercial service merits watching, but we're also encouraged by the care being taken on pricing and price discovery in the near-term (as illustrated by the [roughly] $3 [million] current bid price for the first Blue Origin seat with 3 weeks left of bidding)."

Blue Origin is the commercial space tourism company launched by (AMZN 0.14%) founder and CEO Jeff Bezos. Earlier this week, the Amazon honcho's company unveiled the results of the auction for its first space ticket, and the leading bid was a whopping $2.4 million.

As a result, "We remain positive on the fundamentals of the [Virgin Galactic] offering as well as the scarcity of the experience provided to customers," Walton wrote.

Although it's early days, the twin effects of the new test flight and the robust demand for that space flight ticket are putting some real zip into Virgin Galactic's shares. Walton's hopeful note also helps. On Friday, the company's stock closed 6.4% higher.


John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and Virgin Galactic Holdings Inc. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Virgin Galactic Holdings, Inc. Stock Quote
Virgin Galactic Holdings, Inc.
$6.64 (-1.48%) $0.10, Inc. Stock Quote, Inc.
$142.30 (0.14%) $0.20
UBS Group AG Stock Quote
UBS Group AG
$16.84 (0.30%) $0.05

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/18/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.