What happened
Shares of Wheels Up Experience (UP +5.37%), a private jet charter company, skyrocketed Wednesday morning after an analyst initiated coverage of its stock with a buy rating.
Wheels Up rose by as much as 30.2% in early trading and was up by 20.3% as of 11:46 a.m. ET.
So what
Investors were clearly happy that Goldman Sachs analyst Noah Poponak initiated coverage of Wheels Up with a buy rating and a price target of $5 -- well above the $1.92 share price where it closed Tuesday trading.
Image source: Getty Images.
In his investor note, Poponak said that Wheels Up is a "leading company in an established and growing end-market, but one that is also fragmented and has substantial opportunity for an asset efficiency model," reported TheFly.com.
The analyst conceded that while there are some supply chain issues and labor constraints in terms of hiring pilots, he believes that there's still lots of potential for the company and that Wheels Up has "meaningfully higher" earnings potential.
Including Poponak, there are now five analysts who have buy ratings on Wheels Up, with a consensus price target of $8.99, according to data from MarketBeat.
NYSE: UP
Key Data Points
Now what
Like most stocks in nearly every sector, Wheels Up has seen its share price crumble lately. Even with Wednesday's gains, the private jet company's stock is off by about 50% year to date.
But based on Wednesday's move, some investors appear willing to bet that Wheels Up could end up being a good long-term investment from here. Time will tell whether or not that proves true. In the meantime, investors should keep a close eye out for the company's next earnings report, which will likely be delivered in early August.
