TLDR
- Rocket Lab stock (RKLB) surged over 10% to a new all-time high after Citi raised its price target from $33 to $50 per share
- Citi’s analyst Jason Gursky maintained a Buy rating and expects revenue to reach $2.6 billion by 2029 driven by Neutron rockets
- The stock is up nearly 70% year-to-date as investors bet on long-term potential in the expanding space industry
- Analysts maintain a Strong Buy consensus rating despite the recent surge limiting near-term upside potential
- Citi’s bullish outlook is based on strong demand for commercial satellites and defense sector growth opportunities
Rocket Lab stock rocketed to a new all-time high Monday after Citi analyst Jason Gursky raised his price target to $50 per share. The move makes Citi the most bullish Wall Street firm covering the space company.
Gursky upgraded his target from $33 while maintaining his Buy rating on RKLB. The analyst cited stronger revenue growth expectations and a revised valuation approach that reflects renewed confidence in the company’s long-term prospects.
The stock jumped over 10% on Monday following the announcement. Shares are now up nearly 70% year-to-date, making it one of the top performers in the aerospace sector.
Citi’s new price target suggests upside of over 15% from current levels. This comes even after the stock’s recent surge to record highs.
The investment firm’s bullish stance is based on expectations for Rocket Lab’s business in 2029 rather than 2027. Gursky believes this timeline better reflects a more mature state of the company’s operations.
By 2029, Citi expects revenue to reach around $2.6 billion. This projection assumes 20 Neutron launches annually plus additional satellite construction contracts from U.S. government programs.
Neutron Rockets Drive Future Growth Expectations
Citi’s price target leans heavily on the future success of Neutron rockets. The medium-lift vehicles haven’t launched yet but are designed for larger payloads than Rocket Lab’s current Electron rocket.
The Neutron is targeting satellite launches and future space missions. It represents a key part of Rocket Lab’s strategy to capture more market share in the growing space industry.
This bet on unproven technology reflects broader market optimism. Investors are increasingly willing to pay premium prices for long-term potential rather than current performance.
The space industry appears to be taking off in a big way. Commercial satellite demand for telecommunications and imaging continues to grow.
Rocket Lab also has a long growth runway in the defense sector. Government contracts could provide steady revenue streams as national security priorities expand into space.
Analyst Sentiment Remains Strong Despite Valuation Concerns
According to TipRanks, RKLB stock has received a Strong Buy consensus rating. Nine analysts recommend buying while three suggest holding.
The average price target among Wall Street analysts is $33.80. This suggests potential downside of over 21% from current levels after the recent surge.
Despite the strong rally, analysts remain highly optimistic about long-term growth. However, they see limited near-term upside following the stock’s recent performance.
Rocket Lab has a market capitalization of roughly $19.5 billion. The stock is trading at approximately 34 times this year’s expected sales.
This growth-dependent valuation profile comes with substantial risk. The company’s high multiple means it needs to deliver on ambitious growth targets to justify current prices.
Citi’s analysts are seeing strong sales momentum in the broader aerospace and defense sector. They expect Rocket Lab will be a strong beneficiary of this trend.
The stock is also benefiting from expectations of Federal Reserve rate cuts. Lower interest rates typically boost valuations of growth companies like Rocket Lab.
Citi’s new $50 price target represents one of the highest on Wall Street. The investment firm’s confidence in Rocket Lab’s execution ability is driving this optimistic outlook.
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