Virgin Galactic Could Capture 50% Of Space Tourism, Says Bullish Truist Securities

Virgin Galactic Holdings Inc SPCE seems well-positioned to gain market share in the emerging commercial space tourism industry, according to Truist Securities.

The Virgin Galactic Analyst: Michael Ciarmoli initiated coverage of Virgin Galactic with a Buy rating and $50 price target. 

The Virgin Galactic Takeaways: Commercial space tourism could become a “multi-industry disrupter” and reshape the traditional aerospace and defense investment landscape, Ciarmoli said in the Tuesday initiation note.

Virgin Galactic is among the first market entrants in the space and has “proprietary technology, vertically integrated operations, and plans for a consumer-oriented experience leveraging the Virgin brand,” the analyst said. 

“We see several near-term catalysts for the shares as the company demonstrates its capabilities through a series of testing activities planned during 2021, and believe that once commercial operations commence (likely in our view in early 2022), demand will significantly exceed supply, providing the company with pricing leverage and enabling margin accretion as the company scales its operations,” he said. 

“Ultimately we believe by 2030 SPCE can capture at least 50% of the global space tourism TAM by 2030.” 

SPCE Price Action: Shares of Virgin Galactic Holdings were down 0.86% at $32.23 at last check Wednesday. 

Photo courtesy of Virgin Galactic.