UBS recommends buying SpaceX shares ahead of a new rocket test. The shares have fallen 33% from their peak.

The latest—13th in a row—test of the Starship heavy-lift rocket by Elon Musk’s space company SpaceX could be a positive factor for its stock if it goes according to plan, according to UBS analysts. The launch is scheduled for Thursday, July 16. The mission is expected to validate the key technologies necessary to increase the pace of launches and implement the company’s long-term strategy, according to Switzerland’s largest bank.

“Since its last flight, SpaceX has made numerous changes to its hardware and software. This flight will showcase several new achievements and, in our view, will be positive for the stock,” notes UBS analyst Gavin Parsons, as quoted by CNBC.

The bank estimates that the Starship flight will support UBS’s forecast of four commercial launches by SpaceX this year and 1,588 flights in 2031. During the test, SpaceX plans to launch Starlink V3 satellites into orbit for its satellite internet service.

“Flight 13 is important because it aims to validate certain key capabilities required for this launch cadence, including the reliability of the booster engine ignition, the restart of Raptor engines in space, the deployment of Starlink V3 satellites, and the ongoing development of thermal protection,” Parsons wrote in a statement to CNBC. The launch will also focus on the controlled return of the booster, the network noted.

UBS maintains its “Buy” rating on SpaceX shares with a price target of $210. This implies 55% upside potential relative to the July 15 closing price. On that day, the stock fell below its IPO price of $135 for the first time, although it still ended the day slightly above that level—at $135.27—after losing 0.6%.

Starship is SpaceX’s largest rocket. It has the potential to significantly reduce the cost of spaceflight while greatly increasing SpaceX’s capacity to deliver cargo into orbit, according to Barron’s. The Falcon 9 rocket, which is only partially reusable, launches about 25,000 kg into space at a cost of approximately $1,500 per launch. Starship is fully reusable and is designed to carry 150,000 kg at a cost ten times lower, the publication noted.

The new rocket is a "flywheel" that helps create value for SpaceX, noted RBC Capital Markets analyst Ken Herbert in a Barron's article. Herbert also recommends buying SpaceX stock, with a price target of $225.

Most analysts view SpaceX shares positively: they have issued 28 buy recommendations (Buy and Overweight ratings) compared to five Hold recommendations and two Sell recommendations (Sell and Underweight), according to MarketWatch. The average price target of $243.47 implies a rise of nearly 80% from the July 15 closing price.

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