The share price of Richard Branson's spaceflight company Virgin Galactic Holdings, Inc. rose to records Monday after analysts were enthusiastic about its prospects. The stock price rose to levels not seen in more than five months after Susquehanna Financial Group and Bank of America Global Research tagged the stock with a "Buy" rating.
Virgin Galactic's shares were among the most actively traded securities on the New York Stock Exchange during the day. The stock closed Monday at $20.51 per share for a daily gain of almost 25%. Since the start of the year, the stock price has increased by more than 72%.
Analysts at the Bank of America upgraded its price target for the company to $35 per share - or more than double its closing price last week. The bank said that while the company may not yet be operational, its unique position will likely allow it to take full advantage of the expected increase in demand for space tourism.
Analysts said the aerospace company was particularly interesting because it was one of a few companies capable of building, assembling and operating space-capable aircraft. Conservative research companies have said Virgin Galactic still faced risks and any setbacks or accidents could compromise its ability to become a main player.
Susquehanna Financial said the company was still considered an "innovator" of space technology. Its proposed plans to start serving customers next year puts it in a good position to start generating revenues. Analysts forecast the company might see positive earnings in 2023 and generate free cash flow by 2024.
Earlier in September Credit Suisse reinstated its coverage of Virgin Galactic. The bank tagged the stock with an outperform rating and said its first commercial suborbital flight next year might see further investor interest.
