"SpaceX 2.0": which company's stock is predicted by analyst to rally despite already rising 160%

Baird analyst advised investors to buy shares of Rocket Lab, a manufacturer of rockets and spacecraft. Despite the appreciation of the company's securities by more than 160% since the beginning of the year, the expert believes that in the short term they have the potential to grow by another 20%. He compared the company with its closest competitor - Elon Musk's SpaceX - and said that it is "ready to take off" thanks to the growth in the number of commercial launches, the development of reusable rockets and the expansion of the global market for space services. Baird's opinion is completely opposite to the Wall Street consensus: on the contrary, he suggests a 20% drop in the company's market value.

Baird analyst Peter Arment began coverage of Rocket Lab stock with an Outperform rating (above market) and a target price of $83, CNBC reports. Rocket Lab stock is already up 163% since the beginning of the year, but Baird's target suggests upside potential of about 20% more in the short term. In the long term, Arment believes that the company's shares could "soar" almost three times.

"SpaceX 2.0 is getting ready to take off! - noted the analyst, thus comparing Rocket Lab to Elon Musk's company. - We expect Rocket Lab to become a company worth more than $200 per share in the long term, if the growth in the number of launches is combined with the development of reusable rocket technology."

According to Baird, the growth driver for Rocket Lab's securities will be the growing global market for space launches: from 2020 to 2024, the number of space launches increased by 22% annually, and the trend is expected to continue through 2030.

The analyst also noted Rocket Lab's strong position: its $8.5 million Electron rocket leads the light launch segment, and its new Neutron rocket directly competes with Elon Musk's SpaceX Falcon 9 in the mid-range launch market.

"Rocket Lab has solidified its status as a trusted launch provider, delivering a 94% mission success rate," Arment emphasized. - The $50-million Neutron is poised for its first flight in the second half of 2025/early 2026, and will compete with the Falcon 9."

In addition, the expert emphasized that the company's net balance sheet provides opportunities for further acquisitions. Since 2020, Rocket Lab has already completed five M&A deals in the space systems segment, which, according to Arment, proves its ability to develop its own production of satellites and full-cycle space systems.

At the trades on October 16, Rocket Lab securities were more than 4% more expensive at the moment, but then they lost all the growth and went down by almost 2%. Over the last year they have risen in price by 500%. For comparison: the main U.S. stock index S&P 500 for the same period added only 13%.

Wall Street's views on Rocket Lab stock are divided: of the 18 analysts tracking its performance, 12 recommend buying (Buy and Overweight estimates) and six recommend holding (Hold), according to MarketWatch. However, the analysts' consensus price target of $55.7 implies a drop in the company's market value of about 20% from the previous close.

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