Please ensure Javascript is enabled for purposes of website accessibility

Why Virgin Galactic Stock Jumped 8.4% on Wednesday

By Travis Hoium - May 26, 2021 at 4:11PM

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

Wall Street is jumping on the space tourism bandwagon.

What happened 

Shares of space company Virgin Galactic Holdings (SPCE 0.14%) jumped as much as 8.4% in trading on Wednesday after the company got an analyst upgrade. Shares trailed off late in the day but were still up 7.5% at 3:30 p.m. EDT. 

So what

The catalyst today was analyst Ken Herbert at Canaccord, who initiated coverage on the stock and gave it a $35-per-share price target. He said the company will get a positive catalyst when space tourists start flying, especially celebrities like founder Richard Branson. 

A person wearing a headset looks out the window of a space plane.

Image source: Getty Images.

What's been clear for a while is that it's unknown exactly how long it will take to increase the cadence of flights and expand spaceports around the world. That's a risk factor, but with the test flight last weekend under the company's belt, this should be a big-time growth stock over the next few years. 

Now what

Analyst upgrades don't do anything to change the fundamentals for a stock, but they can give some credence to your investment thesis. In this case, Canaccord is jumping on the Virgin Galactic bandwagon after the most recent test flight in hopes of riding the company's commercial space flight business. But that bullish thesis has been in place for well over a year for long-term investors. Today was just a vote of confidence from Wall Street, which is why the stock is up big again.  

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.

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.
$7.13 (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 08/15/2022.

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.