As private companies get closer to the reality of the next human landing on the moon — and the possibility of the beginnings of colonization there — and to space tourism for regular people, increased news coverage and public awareness should be good for the only publicly traded company in the moon mix, Morgan Stanley said Tuesday.
That company is Virgin Galactic Holdings Inc (NYSE: SPCE), which is among a small handful of firms trying to get people into space and back to the moon. Last week, Morgan Stanley downgraded Virgin Galactic to Equal-Weight, not long after the space exploration and tourism company missed expectations on revenue in its earnings report.
But analyst Adam Jonas said that as the industry ramps up toward human launches, the stock could take flight again as well.
"We believe there is further room for investors to appreciate the significance of upcoming human lunar missions, and its impact on capital formation," Jonas wrote in a note to investors.
Space Tourism Is Coming
And the idea that ordinary "space tourists" will soon be able to fly into orbit also should fuel the stock, he said. Virgin Galactic recently said it would soon re-open sales of tickets for "space tourism," which have been on hold.
"We believe over time increased news flow around space tourism could catalyze itself in increasing awareness to a larger breadth of investors being interested in Virgin Galactic, especially as SPCE is currently the only pure-play publicly traded space tourism company available," Jonas wrote.
Jonas is keeping an Equal-Weight rating on the stock for now, with a $30 price target.
See Also: Are Spaceflights Just Around The Corner?
SpaceX Human Launch Planned
Jonas noted several media reports have pegged May 7 as a "working date" for a human test launch by a Virgin Galactic competitor, Elon Musk's SpaceX, for a capsule designed to ferry astronauts to the International Space Station, an important step toward returning humans to the lunar surface.
NASA wants to have humans back on the moon as part of its Artemis program, in which it is contracting with several private companies, by 2024.
The landings are seen as an early step in a permanent presence on the moon, which may further excite the public. In his note, Jonas quoted Jeff Bezos, who heads another privately held company that's in the space race, Blue Origin: "We're not going back to the moon to visit, we're going back to the moon to stay."
SPCE Stock Flying High
Virgin Galactic's stock traded up more than 4% Tuesday morning, but eventually sold off and was down 4.3% to $25.25 at time of publication.