Key Takeaways
- New Street Research initiated coverage on 10 space sector stocks, awarding Buy recommendations to Rocket Lab, Viasat, EchoStar, and Space42.
- SpaceX is targeting a mid-2026 IPO with a potential valuation reaching $2 trillion.
- The company’s Starship vehicle could slash orbital launch expenses by 90% versus its Falcon 9 system.
- Rocket Lab shares have surged 415% in the past year, with 80% of analysts rating it a Buy.
- Morgan Stanley forecasts the space economy could grow to $1 trillion by 2040.
New Street Research has initiated coverage on 10 space sector equities, highlighting four companies as top investment opportunities. This coverage launch arrives as investor interest in the commercial space industry intensifies ahead of SpaceX’s anticipated public debut.
SpaceX is aiming for a mid-2026 market entrance that could generate up to $75 billion in proceeds. Analysts project the company’s valuation could soar as high as $2 trillion, positioning it among the largest initial public offerings ever recorded. New Street Research has indicated it will initiate formal coverage of SpaceX prior to its public listing.
The investment firm characterizes space as “the next frontier,” projecting it could unlock trillions in economic value throughout the coming decades. According to their analysis, space-based infrastructure will revolutionize sectors spanning telecommunications, national defense, and artificial intelligence computing.
Alphabet and SpaceX have both signaled plans to deploy AI computing facilities in orbital environments. Military and defense-focused space applications are projected to expand significantly in coming years.
Declining launch economics represent a critical catalyst driving industry expansion. SpaceX’s Falcon 9 vehicle reduced orbital access costs by over 95% relative to the Space Shuttle program. The company’s next-generation Starship platform promises to cut expenses by an additional 90% compared to Falcon 9.
Analysts’ Preferred Space Investments
New Street Research assigned Buy ratings to four companies: Rocket Lab, Viasat, EchoStar, and UAE-headquartered Space42.
Rocket Lab stands out as the sole Western competitor to SpaceX in commercial launch services. The company’s shares have rocketed 415% higher over the trailing twelve months. Wall Street’s consensus price target sits near $105, while New Street established a more aggressive $150 target. The stock finished Wednesday’s session at $124.15.
Approximately 80% of analysts following Rocket Lab maintain Buy recommendations. The company is projected to achieve profitability by 2028.
Viasat and Space42 earned Buy ratings primarily due to their spectrum holdings — the radio frequencies essential for transmitting communications and data. EchoStar possesses both an equity position in SpaceX and valuable spectrum licenses.
Satellite communications firms AST SpaceMobile, SES, and Iridium were assigned Hold ratings. Eutelsat, Planet Labs, and Telesat received Sell recommendations.
Industry Outlook and Risks
Morgan Stanley projects the global space economy could expand to $1 trillion by 2040. However, analysts emphasize significant investment risks — the sector demands substantial capital expenditures, depends heavily on government procurement, and requires sophisticated technology development.
Lockheed Martin stands as one of the industry’s dominant players. Space-related operations generate over 15% of its total revenue, with additional exposure through hypersonic weapon systems and satellite production via a Boeing partnership.
L3Harris strengthened its space capabilities through its 2023 purchase of Aerojet Rocketdyne, which was one of only two American manufacturers producing large-scale rocket propulsion systems.
AST SpaceMobile is developing technology enabling conventional mobile devices to communicate directly with satellites. The firm has secured partnerships with cellular network operators but confronts substantial expenses to deploy its complete satellite constellation.
Rocket Lab currently trades at 111 times forward 12-month revenue estimates. New Street’s $150 price objective incorporates approximately 30 times projected 2030 operating earnings.
EchoStar concluded Wednesday’s trading at $133.23, compared to New Street’s $161 valuation target. Viasat closed at $70.58, versus the firm’s $100 price objective.
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