Morgan Stanley Sees Sharp Downside In This Aviation Company

November 9, 2021 3:07 PM | 1 min read |

Morgan Stanley analyst Brian Nowak initiated Wheels Up Experience Inc UP with an Underweight rating and a price target of $5.90, implying a downside of 19%.
Nowak sees a relatively small total addressable market for Wheels Up. The cost of flying private limits user adoption to the top 1% of highest-earning U.S. households.
His analysis suggests Wheels Up's total consumer addressable market at 513,000 U.S. households and $25B of total consumer spend, with current household penetration at only 2% of this.
He sees penetration heading to 5% by 2025 but struggles "to get more aggressive than this without incremental adoption drivers."
Price Action: UP shares are trading lower by 9.38% at $7.34 on the last check Tuesday.