Rocket Lab (RKLB) shares climbed more than 6% on Monday, recovering from Friday's steep decline, after KeyBanc Capital Markets upgraded the stock and argued that the recent selloff across space equities was overdone. The rally helped lift the broader space sector, with Firefly Aerospace also gaining over 6% and SpaceX extending its post-IPO advance.
KeyBanc Upgrades Rocket Lab and Firefly
KeyBanc analyst Michael Leshok raised his ratings on both Rocket Lab and Firefly Aerospace to Overweight from Sector Weight, assigning a $135 price target to Rocket Lab and a $50 target to Firefly. The upgrades come after SpaceX's blockbuster Nasdaq debut on Friday, which triggered a sharp selloff in other space stocks as investors rebalanced portfolios to make room for the newly public giant.
“Last Friday’s record-setting SpaceX IPO sent ripple effects across our coverage of space-centric equities, with the sector selling off sharply on IPO day and over the weeks leading up to it,” Leshok wrote. “We think this is unwarranted and largely systematic in nature, as funds make room for the space behemoth.”
The analyst emphasized that the sector-wide weakness was not driven by deteriorating fundamentals but by portfolio repositioning. Alongside Rocket Lab and Firefly, shares of AST SpaceMobile, Intuitive Machines, Voyager Technologies, and Redwire all posted double-digit declines on Friday, though most recovered some ground on Monday.
Neutron Rocket and Commercial Launch Leadership
A key pillar of KeyBanc's bullish thesis is Rocket Lab's expanding position in the commercial launch market. The firm describes Rocket Lab as the second-largest player in the industry behind SpaceX, with its Electron launch vehicle having completed approximately 90 successful missions.
KeyBanc also expressed confidence in Rocket Lab's Neutron rocket program, which remains on track for its inaugural launch later this year. According to the firm, additional visibility into the project over the past six months has increased confidence, and a testing anomaly encountered in January has been fully resolved.
“SpaceX’s premium valuation shows the value of having in-house access to space and the myriad of potential end-use applications that come with that capability,” Leshok added. “We continue to expect these applications to evolve over time and believe Rocket Lab is among the best positioned to adapt to the dynamic market given its satellite design/manufacturing and launch heritage.”
Strong Financials and Nasdaq-100 Inclusion
Investor sentiment has also been bolstered by Rocket Lab's recent financial performance. The company reported first-quarter revenue of $200.35 million, exceeding analyst expectations of $189.65 million and representing year-over-year growth of 63.4%. Earnings per share came in at negative $0.07, matching Wall Street forecasts.
Rocket Lab is scheduled to join the Nasdaq-100 on June 22, a move that could generate additional demand from index-tracking funds and exchange-traded products managing hundreds of billions of dollars in assets. Stifel recently raised its price target on Rocket Lab to $132 from $110 while maintaining a Buy rating, citing strong revenue growth and an expanding contract backlog.
For more on the broader space sector dynamics, see our analysis of SpaceX Short Interest Surges to 29% of Float: Is a Meme Stock Squeeze Brewing? and Rocket Lab Stock Plunges 55%: Technicals Signal Further Downside to $50.
This article is for informational purposes only and does not constitute financial advice.
