Space stock Intuitive Machines soars to six-month high on KeyBanc initiation

Shares of Intuitive Machines, a small-cap developer of lunar exploration systems, jumped nearly 38% on Friday, December 19, reaching their highest level since late February. The move followed the initiation of coverage by KeyBanc Capital Markets, which rated the stock a "buy" and set a target price that still implies 34% upside after Friday's rally.

Intuitive Machines shares rose 37.7% to $14.94 per share on Friday, the highest closing level since late February.

The catalyst was a note from KeyBanc initiating coverage of the company with a "buy" rating, Insider Monkey reported. KeyBanc set a target price of $20 per share, implying upside of about 34% versus the Friday close

KeyBanc based its valuation on Intuitive Machines’ position in lunar rover development and on what it described as significant opportunities to expand lunar and in-space services, Insider Monkey reported. The company operates three core business lines: delivery services to the Moon; data transmission and interpretation; and infrastructure as a service, including navigation.

In the third quarter, Intuitive Machines reported revenue of $52.4 million, down 10.4% year over year. The net loss narrowed nearly tenfold to $9.96 million.

Earlier in December, Cantor Fitzgerald also flagged Intuitive Machines shares as undervalued and set a target price of $16 per share, implying upside of about 70% at the time. Cantor analyst Andres Sheppard cited the planned $800 million acquisition of Lanteris Space Systems as a key driver.

Following the transaction, subject to regulatory approval, the combined backlog of the two companies is expected to reach $920 million. At the end of the third quarter, Intuitive Machines’ backlog stood at $235.9 million.

Sheppard wrote that the deal would effectively turn Intuitive Machines into a more integrated space company, with capabilities spanning spacecraft development, manufacturing, and mission operations. The company is also among three bidders for a NASA contract to develop a lunar terrain vehicle.

Year to date, Intuitive Machines shares are up nearly 17%, despite a sharp selloff in March. At the time, the company was conducting its second lunar mission, IM-2, under NASA’s Commercial Lunar Payload Services initiative. The lander reached the Moon but tipped over during landing and was unable to recharge, operating for about 24 hours instead of the planned 10 days.

Wall Street analysts currently assign ten “buy” ratings versus one “sell” to the stock, MarketWatch data shows. The average target price stands at $16.10 per share, implying upside of just under 8% versus current levels.