Please ensure Javascript is enabled for purposes of website accessibility

Analyst Hikes Virgin Galactic Price Target 50% After Dropping It 33% Last Week: What's Going On

By Rich Duprey - May 24, 2021 at 10:55AM

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

The stock may take investors for a ride beyond the stratosphere, just like its spaceship.

Hold on to your seats as Virgin Galactic Holdings (SPCE -0.14%) stock soars into space, much as its VSS Unity spaceplane did over the weekend after the oft-delayed test flight finally reached the pre-ordained altitude of 44,000 feet.

And just as fast, Wall Street analysts reversed themselves and upgraded the stock. Don't worry: You're not the only one who got whiplash from the course correction.

Virgin Galactic spaceplane

The Virgin Galactic spaceplane. Image source: Virgin Galactic.

Bernstein analyst Douglas Harned initiated coverage of Virgin Galactic only last month with an outperform rating and a price target of $27 per share. Yet after the rocketeer reported earnings on May 10 and merely said it was "evaluating" its next launch date, many took that to mean another delay and Harned lowered his target to $18, a 33% drop.

This morning, however, following the Unity's successful launch, he hiked his price target back up to $27 per share again, this time citing Virgin's "highly attractive economics once it is up and running."

With a craft that promises to reduce travel time between New York and London to just two and a half hours, about a third of what it takes today, Virgin is angling toward making consumer space travel an everyday occurrence. In comparison, SpaceX seems focused more on the commercial aspects of it, meaning those "highly attractive economics" should have been apparent regardless. 

Harned admits the 50% gap between his two price targets could be rapidly closed during pre-market trading, and Virgin's stock was already up 20% heading into the market open. If Virgin Galactic ends up not meeting his target right away, Harned contends the former SPAC stock becomes a much more attractive investment.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Virgin Galactic Holdings Inc. 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.
$7.07 (-0.14%) $0.01

*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 08/16/2022.

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.