Virgin Galactic’s Stock Price Is Soaring but One Man Could Cause Its Crash

  • Virgin Galactic’s stock is soaring again after Morgan Stanley’s Adam Jonas gives it an overweight rating.
  • Last month, Jonas called the stock overvalued and asked management to dilute investors
  • While it looks like Morgan Stanley is spot-on with its directional calls, its analysts are exerting a massive influence on the price of the stock.

Retail investors have been on a roller coaster ride as Morgan Stanley analysts repeatedly change their outlook for Virgin Galactic (NYSE:SPCE). Analyst coverage has sent shares soaring from $12.00 to an all-time high of $42.00 before crashing back down again.

Now, shares are up 17% as Morgan Stanley’s Adam Jonas upgrades the ticker to an overweight rating with a price target of $24 despite no meaningful fundamental changes in the company.

Given Jonas’s track record of contradictory coverage, it may only be a matter of time before Morgan Stanley pulls the plug on Galactic’s latest rally, sending shares crashing back down.

Virgin Galactic Is a Retail Favorite

Virgin Galactic plans to provide suborbital space flights for wealthy travelers as well as scientific missions. Tickets are expected to cost around $250,000 each.

While the company reports virtually zero profit and revenue, retail investors are excited. It has built up an impressive backlog of pre-orders and customer interest. Virgin Galactic reported 7,957 registrations of interest in the fourth quarter alone.

The company also received a $20 million investment from Boeing which is presumably interested in its hypersonic travel technology.

One Man Is Causing This Stock to Fluctuate

Despite the potential surrounding Virgin Galactic, one man seems to be the driving force behind its stock price fluctuations. Morgan Stanley’s Adam Jonas made a name for himself by covering Tesla before moving on to SpaceX and now Virgin Galactic.

Jonas started covering Virgin Galactic on Dec. 9, 2020, with a price target of $22. Since then, investors have been on a roller coaster…

Source Link