By
Bena Ilyas
April 25th, 2024
Virgin Galactic Holding Inc (SPCE) shares rose by $3.35, approximately 25.83% yesterday. The rise is attributed to the positive rating by Morgan Stanley analyst Adam Jonas.
Virgin Galactic Holdings Inc (NYSE: SPCE) shares jumped more than 25% yesterday after wiping out all the gains previously made early in the year. The SPCE shares rise is being attributed to an upgrade in ratings by Morgan Stanley analyst Adam Jonas. He upgraded the stocks from equal weight to overweight, despite lowering the price target from $30 to $24.
Jonas said:
“Despite the modest adjustment to our space tourism, the company maintains a healthy cash position, $500 million, and its expected, $16 million per month cash burn, position it well to navigate any near-term headwinds.”
Despite Virgin Galactic shares having fallen over 60% in the past few weeks, Jonas is positive on the stocks as the company’s balance sheet remains intact.
Today in the premarket, SPCE was 5.64% up. Its price reached $17.24. Yesterday, it closed at $16.23.
Coronavirus has significantly affected the tourism sector which also relies on air travel for transportation. However, the United States government has come into the rescue of most businesses that have been hit hard by the coronavirus pandemic. This after the White House and the Senate came into a common agreement on a $2 trillion deal to shield the economy from further fall.
The airline industry is expected to reap big from the stimulus package which is to be voted later in the day. At the beginning of the year, the company’s stock rallied after it released the fourth quarter and the full year 2019 financial report.
Big Leap from a Good History
In a press statement, the chief executive officer at Virgin Galactic, George Whitesides, said:
“Throughout 2019, we continued to achieve a key milestone in our mission to open access to space in a safe, innovative and affordable way.”
He continued to add that, ‘during the fourth quarter, we took major steps towards reaching that goal by completing our transaction with social capital Hedosophia and becoming publicly listed on the NYSE, as well as building operational readiness at Spaceport America in New Mexico. The progress we made in 2019, combined with a high level of interest from potential customers, underpin the steps we are taking towards reopening ticket sales. We are continuing to build on our strong momentum as we enter the most exciting chapter of our story to date and prepare for commercial launch.’
What’s Next for Virgin Galactic and Its Shares
With the current coronavirus pandemic, most investors are opting to watch from a safe distance as the volatility in the stock market shows no signs of ending soon. It is not business as usual for Virgin Galactic which has been preparing to launch commercial space tourism.
If the situation is not taken with the seriousness that it is calling for, the tourism sector might be hit even much more than the company is anticipating.