Virgin Australia shares fly 10% higher: Time to buy, sell or hold?

It’s been a great week for Virgin Australia Holding Ltd (ASX: VGN) shares. The ASX travel stock is trading in the green once again on Thursday afternoon, up 0.15% to $3.305 a piece.

It’s been a volatile few months for the airline, though. The shares crashed 20% from October to November last year, and then recovered 18.5% in December. The share price crashed again, this time by around 15%, throughout the first 6 weeks of the year, and now they’re on their way back up once again.

Over the past week, Virgin shares have jumped 10.53% and they’re now 13.97% higher over the year.

What is pushing Virgin Australia shares higher?

There is no price-sensitive news out of the travel company this week to explain the uptick. But after a 15% drop between December and earlier this month, it’s likely that investors have identified a buying opportunity. 

Virgin is set to deliver its first interim result since being relisted on the ASX in June last year, on the 27th of February.

And analysts are optimistic that the announcement will be good news.

Since its relisting on the ASX 200 in June this year, the airline has repositioned itself under a simpler, leaner business model, shedding many of its old inefficiencies. And I like what the business has done. 

The team at Jarden recently said that, while it is too early for the company to start paying dividends, it expects solid results later this month. The broker said the airline’s fundamentals are strong for the near term.  

Are Virgin Australia shares a buy, sell or hold?

At the current share price, I think the airline’s shares are a bargain. Analysts are mostly bullish on the stock’s robust upside this year.

TradingView data shows that 5 out of 7 analysts have a buy or strong buy rating on Virgin Australia shares. The average target price is $3.95 for the next 12 months, which implies a potential upside of 19.27% at the time of writing.

Although others think the upside could be anywhere between 10.14% and 27.27% from the current share price.

Jarden has a $4 target price on the shares. The team at Ord Minnett are also impressed with the company’s near-term outlook. The broker has a buy rating and $4 target price on Virgin Australia shares.

The post Virgin Australia shares fly 10% higher: Time to buy, sell or hold? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.