MW Rocket Lab stock climbs more than 6% after KeyBanc raises price target

By James Rogers

Space-launch company Rocket Lab is seeing "strong growth momentum," according to KeyBanc Capital Markets

Shares of Rocket Lab USA Inc. are up 6.1% Thursday after KeyBanc Capital Markets raised its price target for the space-launch company.

"We increase our price target to $12 (from $11) to reflect better appreciation of the business amid recent secular momentum, while our underlying estimates continue to reflect strong growth momentum in both Launch Services and Space Systems; we see a runway for shares to increase well in excess of our price target over time, though this requires execution," wrote KeyBanc Capital Markets analyst Philip Gibbs, in a note Wednesday.

The Rocket Lab $(RKLB)$ price target raise is the second from KeyBanc in as many months. Last month KeyBanc raised its Rocket Lab price target to $11 from $8.

Related: Rocket Lab's stock soars as KeyBanc raises price target

Rocket Lab's recent milestones include the company's successful hot fire test of its Archimedes engine, ongoing build-out of its Neutron launch pad, Electron launch execution, continued scaling of Space Systems, and experienced leadership additions, Gibbs added.

In August SpaceX rival RocketLab said that it successfully fired its Archimedes engine for the first time. The Archimedes engine will be used in the company's new Neutron rocket.

The first flight of the 141-foot high Neutron rocket is scheduled for mid-2025. Rocket Lab says that Neutron is designed for the deployment of "mega constellations" of satellites, deep-space missions and human spaceflight.

Related: Space stocks climb again as 'momentum sector' drives gains

Last month Rocket Lab successfully launched the 53rd mission of its Electron rocket, deploying five satellites for French company Kinéis. KeyBanc notes that Rocket Lab is the fastest launch provider in the world to achieve 50 successful orbital launches.

Rocket Lab is ramping its Space Systems business rapidly, according to KeyBanc, which adds that the company's recent results and guidance have surprised to the upside. Set against this backdrop, the analyst firm sees ability for Rocket Lab to continue its quarter-over-quarter growth momentum.

The space-launch company reported a 71% revenue hike in its second-quarter results in August, marking the highest revenue quarter in the company's history.

Related:Space stocks rise, lifted by Virgin Galactic and Rocket Lab results

KeyBanc Capital Markets maintained its overweight rating for Rocket Lab. Of 14 analysts surveyed by FactSet, nine have an overweight or buy rating, and five have a hold rating for Rocket Lab.

Rocket Lab shares are up 109.3% in 2024, outpacing the S&P 500 index's SPX gain of 21.8%.

-James Rogers

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October 24, 2024 11:50 ET (15:50 GMT)

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