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Virgin Galactic Shares Up - Cowen Sees Stellar Potential

Virgin Galactic's commercial potential is stellar, says a Cowen analyst, who initiated coverage of the spaceflight-services company at outperform.
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Virgin Galactic  (SPCE) - Get Virgin Galactic Holdings Inc Report shares on Monday rose after analysts at Cowen initiated coverage of the spaceflight-services company with an outperform rating and a $22 price target. 

The price target represents 26% potential upside from the stock's Friday close at $17.46. Virgin Galactic's average Wall Street price target is $25 a share. 

Virgin Galactic "is uniquely positioned to benefit from the growing consumer interest toward luxury experiences, especially among high-net-worth individuals," said analyst Oliver Chen. 

"We believe a substantial growth opportunity lies ahead with the commercial spaceflight business, which already has [approximately] 600 reservations, and the development of high-speed point-to-point travel."

Virgin shares at last check were up 3.6% at $18.10. 

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Earlier this month, Virgin sold a secondary offering of 23.6 million shares at $19.50 each, raising about $460 million. 

The offering came after the Las Cruces, N.M., company pushed back its timeline for the beginning of trips to space amid the coronavirus slowdown. 

Virgin Galactic said that it expected to launch two more manned test flights this fall with commercial flights of its SpaceShipTwo suborbital vehicle launching no earlier than the first quarter of 2021. 

Previously, the company said it expected to be able to take Founder Richard Branson on a suborbital space flight by early next year. Now, the company says  Branson's flight will be the third powered flight from the vehicle's launching pad in New Mexico. 

In 2019, the company said that it planned to begin commercial service by mid-2020. 

Virgin Galactic shares are up more than 50% year to date, but they are trading 59% below their 52-week high of $42.49, set in mid-February.