Virgin Galactic Stock Rises After Lofty Cowen Rating

Calls have been popular in the options pits, and its more of the same today

Assistant Editor
Aug 31, 2020 at 10:08 AM
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The shares of Virgin Galactic Holdings Inc (NYSE:SPCE) are up 3.1% at $18 this morning, after Cowen and Company initiated coverage with an "outperform" rating and $22 price target. The brokerage firm glowed about the demand for commercial spaceflight, as well as the vertically-integrated nature of the company, which can generate "high-margin" revenue for the second half of 2021. 

Virgin Galactic stock has been stalled on the charts for the past two weeks or so, with the 200-day moving average providing a steady floor. Up 51.1% year-to-date, the equity is cruising toward a 18.9% loss for August, with today's rally falling short of its 20-day moving average.

Cowen is joining a slim but bullish group of analysts, with two at a "buy" or better rating coming into today. Meanwhile, the 12-month consensus price target of $27 is a 54.6% premium to current levels. The stock remains heavily shorted though, with a whopping 65% of SPCE's total available float dedicated to bearish bets.

In the past 10 days, calls have nearly tripled puts. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 59,965 calls and 20,322 puts have been bought. Today is more of the same, with 36,000 calls changing hands in just the first hour of trading--triple the average intraday amount. Most popular is the weekly 9/4 20-strike call, with new positions being opened. 

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