It's usually good news when an ambitious, upstart company partners with a top name in its industry. At least, that's how Virgin Galactic (SPCE 5.76%) investors reacted to the news of their company partnering with a business at the top of the aerospace food chain earlier this week.
As a result, according to data provided by S&P Global Market Intelligence, Virgin Galactic's shares rocketed nearly 17% higher across this holiday-shortened trading week.
Thursday morning, Virgin Galactic announced that it had reached a deal with Aurora Flight Sciences to partner in the design and construction of its upcoming generation of motherships. Aurora, which has been in business for over 30 years, is a subsidiary of mighty Boeing (BA 1.17%). The arrangement covers the design and production of two motherships.
Virgin and Aurora had already been collaborating. In its press release trumpeting news of the deal, Virgin revealed that the pair were working together recently to devise design specifications and other aspects of the project.
The first of the two new motherships is expected to formally join the Virgin fleet in 2025, the company said.
It wasn't only investors getting in touch with their inner bull on Virgin following the news.
Later on Thursday, Cowen analyst Oliver Chen took pains to reiterate his outperform (i.e., buy) recommendation on the company's stock at a $12 per-share price target. Although he acknowledged that the project will face some "hurdles and test," he pointed out that certain aspects of the contract -- such as risk-sharing and expense management measures -- are beneficial for Virgin, in addition to its partner's scale.