Morgan Stanley has raised the stock target on rival SpaceX by 240%. What is the bank betting on?

Investment bank Morgan Stanley immediately by 240% raised the target price of shares of Rocket Lab USA, specializing in the delivery of cargo to Earth's orbit and competing with Elon Musk's SpaceX. However, the new target was only 6% above the last closing price. At the same time, Morgan Stanley maintained a neutral rating on the company's securities (Equal Weight).

"Today, Rocket Lab is the clear market leader in small launches [with the Electron rocket], and its medium-class rocket [Neutron] is close to entering service amid a limited supply of launch capacity," Morgan Stanley analysts said in a note cited by Reuters. Morgan Stanley projected one test launch of Neutron in 2025, rising to 12 annual missions by 2029.

The bank also noted that the market now values Rocket Lab based on SpaceX's implied valuation. And it, according to Bloomberg, in July, approached $400 billion.

In trading on Monday, Rocket Lab shares were up 7% at one point, but then slowed down a bit. Since the beginning of the year, the space company's shares have soared 152%, and over the past 12 months, Rocket Lab's stock has appreciated almost seven times.

Barron's notes that shares of a number of space companies on October 13 rose by an average of 6% in anticipation of the 11th launch of Starship rocket from SpaceX, scheduled for Monday evening. In addition to Rocket Lab, Planet Labs, AST SpaceMobile, Intuitive Machines and Redwire were also up.

According to LSEG, 10 out of 15 analysts tracking Rocket Lab stock recommend buying it, while five advise holding. The average target price of the securities is $50.5, which is 21% below the last closing price.

Morgan Stanley's target revision follows the company's announcement on October 10 that it has agreed with Japanese satellite operator Institute for Q-shu Pioneers of Space (iQPS) on three separate launches using an Electron rocket that will take place no earlier than 2026 from Launch Complex 1 in New Zealand. Under the contract, Rocket Lab will be the primary launch service provider for the iQPS commercial Earth observation satellite network.

Rocket Lab also announced last week that it is ramping up production capacity and launch frequency and plans to increase the number of missions to more than twenty in 2025.

Rocket Lab is the market leader in small launches thanks to its Electron rocket: it has delivered more than 230 satellites in 72 launches since 2017, writes Investing.com. This makes Electron the second most frequently used private light rocket in the world. SpaceX's Falcon 9 is in first place by a noticeable margin: it has delivered more than 125 launches in 2025, accounting for more than half of all orbital launches this year.

In August, in a presentation accompanying its second-quarter earnings, Rocket Lab said it was making "every effort" to bring Neutron to the launch pad by the end of 2025, MarketWatch writes.

This article was AI-translated and verified by a human editor