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Why Virgin Galactic Stock Jumped 5.8% on Friday

By Travis Hoium - May 21, 2021 at 1:01PM

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Tomorrow is a big day for Virgin Galactic.

What happened 

Shares of space company Virgin Galactic Holdings (SPCE -0.57%) jumped as much as 5.8% on Friday after the company announced plans for a test flight and got an upgrade from an analyst. At 11:45 a.m. EDT shares were still up 2.8% for the day. 

So what

Yesterday, Virgin Galactic announced that it has planned a test flight for VSS Unity on Saturday, May 22, pending weather conditions. This flight was originally planned to be completed in December but after VSS Unity disconnected, the booster computer lost connection and Unity failed to reach space. That led to fixes to the spacecraft and a number of delays until this week. 

Virgin Galactic aircraft in a hanger.

Image source: Virgin Galactic.

Also helping Virgin Galactic shares today was UBS, which upgraded the stock to a buy rating, anticipating that three more test flights over the summer could help shares rise. Analyst upgrades can often move a stock in the short term, although they don't fundamentally change the company's operations.

Now what

There's a lot of speculation ahead of Saturday's planned flight and a lot is riding on its success. Right now, short-term traders are betting on the best for the flight but keep in mind that shares could drop if there's another malfunction. One way or another, Virgin Galactic is sure to be an exciting stock to follow over the next few months. 

Travis Hoium owns shares of Virgin Galactic Holdings Inc. The Motley Fool owns shares of and recommends Virgin Galactic Holdings Inc. The Motley Fool has a disclosure policy.

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