Please ensure Javascript is enabled for purposes of website accessibility

Why Wheels Up Experience Stock Is Up Today

By Lou Whiteman – Sep 1, 2021 at 4:03PM

Key Points

  • Wheels Up has only been public a few months, and has spent most of that time heading downward.
  • Raymond James is bullish on the company, seeing a bright future for aviation and drawn to the predictability of the membership model.

Motley Fool Issues Rare “All In” Buy Alert

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 business jet membership service gets a positive write up from a Wall Street analyst.

What happened

Shares of Wheels Up Experience (UP 4.07%) soared 11% higher on Wednesday after the private aviation membership service was initiated with an outperform rating by one Wall Street analyst.

So what

Wheels Up has been around for seven years, but it only went public a few months ago via a merger with a special purpose acquisition company (SPAC). The stock has flown through some turbulence since it began trading, down more than 40% prior to Wednesday.

A pilot looks over his shoulder from the cockpit of a business jet.

Image source: Getty Images.

But Raymond James analyst Aaron Kessler sees promise in the provider of jet transportation services for members, initiating coverage with an outperform rating and a $10 per share price target. Kessler said the private aviation total addressable market is large and growing, and Wheels Up has established itself as a market leader.

The analyst likes Wheels Up's membership model, which provides predictable revenue, and believes availability of planes will allow the company to scale up efficiently.

Now what

I agree with Kessler there is a lot of promise to Wheels Up, and in a post-COVID environment demand for convenient and relatively affordable access to private aviation is likely to grow. But it might not be enough to prevent Wheels Up from flying through turbulence in the near term. The company has a relatively small number of shares available for trading, which tends to lead to more dramatic price swings. And if the stock price does rise, institutional holders who are no longer restricted from selling could decide to cash out at least parts of their stakes.

This is a young company selling into a still-developing market, so some caution is advised. But for those who can ride through the headwinds without getting air sick, there are solid reasons to make Wheels Up a part of a well-diversified portfolio.

Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Nearly 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

Wheels Up Experience Inc. Stock Quote
Wheels Up Experience Inc.
$1.28 (4.07%) $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 11/30/2022.

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.