Why the Virgin Australia share price soared higher on Friday

The Virgin Australia Holdings Ltd (ASX:VAH) share price was a big mover on Friday. Here's why…

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

One of the best performers on the All Ordinaries on Friday was the Virgin Australia Holdings Ltd (ASX: VAH) share price.

The airline operator's shares finished the day almost 8.5% higher at 19.5 cents.

Why did the Virgin Australia share price take off?

With no news out of the airline or any broker notes that I'm aware of, I suspect that today's gain is due to bargain hunters believing that its shares had bottomed.

Prior to today its shares were down 33% year to date and trading at a 52-week low of 18 cents.

Which is quite a contrast to the performance of the Qantas Airways Limited (ASX: QAN) share price which is up over 13% this year.

Will Virgin Australia continue its ascent?

From the broker notes that I have seen, I wouldn't count on Virgin Australia's shares continuing to ascend from here.

A note out of UBS at the end of October declared the airline as a sell with a 19 cents price target. And while fellow broker Goldman Sachs has a higher price target of 21 cents on its shares, it has retained its sell rating.

Instead, Goldman thinks investors should be buying the shares of arch rival Qantas. It has a sizeable $6.97 price target on the flag carrier airline, which implies potential upside of 22% over the next 12 months.

I agree with this view. With oil prices tumbling lower over the last couple of months, I believe Qantas is positioned perfectly to profit thanks to its strong operational performance and its fuel hedging policy.

All in all, I think Qantas is the best airline to invest in right now. But if you're not keen on airline shares and still want to gain exposure to the tourism boom, you could consider Sydney Airport Holdings Pty Ltd (ASX: SYD). I think the airport operator is well-positioned to grow at a solid rate for the foreseeable future.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Sydney Airport Holdings Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

A young male ASX investor raises his clenched fists in excitement because of rising ASX share prices today
Share Gainers

3 ASX All Ords shares up 50%+ in March

These ASX shares have been on fire this month. But why?

Read more »

Woman looks amazed and shocked as she looks at her laptop.
Share Gainers

Why Mesoblast, Patriot Battery Metals, Sigma, and Zip shares are pushing higher

These shares are having a good session on hump day. But why?

Read more »

Woman looks amazed and shocked as she looks at her laptop.
Consumer Staples & Discretionary Shares

If you'd put $20,000 in this ASX retail stock at the start of 2023, you'd have $134,000 now

This online retailer has executed a remarkable turnaround for its investors.

Read more »

Fancy font saying top ten surrounded by gold leaf set against a dark background of glittering stars.
Share Gainers

Here are the top 10 ASX 200 shares today

It was back to earth for ASX shares this Tuesday.

Read more »

Two happy scientists analysing test results.
Healthcare Shares

Mesoblast share price rockets 36% on breaking FDA news

ASX investors are sending the Mesoblast share price soaring following promising FDA news.

Read more »