Hold on to your seats as Virgin Galactic Holdings (SPCE -5.11%) 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.
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.