- Virgin Galactic soared more than 14% on Wednesday morning after Morgan Stanley said investor interest in the stock rivaled that of Tesla.
- The bank's analysts "are having more conversations" about Virgin Galactic than any other US stock they cover "with the possible exception of Tesla," a Wednesday note said.
- Morgan Stanley noted that the company's shares were approaching its $22 price target but added its $60 bull-case target implied an additional 250% climb.
- Watch Virgin Galactic trade live here.
- Visit Business Insider's homepage for more stories.
Richard Branson's Virgin Galactic spiked more than 14% in early trading on Wednesday after Morgan Stanley analysts said the stock's investor interest was on par with Tesla's.
The company is already nearing the $22 price target set by Morgan Stanley in December and is up 95% from its first day of trading in late October. Yet the analyst Adam Jonas noted that his $60-per-share bull-case implied an additional 250% climb and that a "significant increase" in investor interest could drive the stock higher in its first year of public trading.
The investment bank said it had noticed "a materially greater frequency" of investors who "understand the pitch" and want to learn more about the company's position in the space-travel industry. The analysts "are having more conversations on SPCE" than any other US stock they cover "with the possible exception of Tesla," they wrote on Wednesday.
Tesla has been among the most talked-about stocks since its June 2010 initial public offering, as investors bet on whether the electric-car company could turn a profit and push into a new vehicle sector. It recently retook the crown as the most shorted stock in the US, yet the automaker soared to a record high on Wednesday as improving sentiment on Wall Street and the opening of its Shanghai Gigafactory propped up share prices through January.
Virgin Galactic's stock is already up about 65% year-to-date, massively outperforming the S&P 500's 3% gain in the same period. The jump even beat Tesla's 40% gain in 2020.
Virgin Galactic's Wednesday run set it up for an eighth consecutive record close.
Virgin Galactic also stands to profit from investors' "greater appreciation" of hypersonic travel and the company's opportunity in the industry, Morgan Stanley said. The bank initiated coverage on Virgin Galactic shares on December 9, saying that the company's greater investment opportunity came from an expansion into hypersonic travel. The rapid point-to-point service could drive as much as $800 billion in annual sales by 2040, according to Morgan Stanley.
The analysts maintained an "overweight" rating on the company's stock along with their $22 price target.
Virgin Galactic traded at $18.89 per share as of 1:15 p.m. ET on Wednesday.
The company has a consensus price target of $19 from the three analysts covering the stock, according to Bloomberg data.
Now read more markets coverage from Markets Insider and Business Insider:
Existing-home sales in the US soar to best pace in nearly 2 years
Jamie Dimon says financial markets' only bubble is in sovereign debt
The top 17 brands in influencer marketing that are innovating and pushing the industry forward
