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Investing.com - Citi has raised its price target on Rocket Lab USA (NASDAQ:RKLB) to $50.00 from $33.00 while maintaining a Buy rating, citing the company’s progress with its Neutron rocket development and growth in its satellite systems business. The stock has shown remarkable momentum, delivering a 590.8% return over the past year, though according to InvestingPro analysis, it’s currently trading above its Fair Value.
The price target increase reflects a shift in Citi’s valuation methodology, now looking ahead to Rocket Lab’s revenue potential in 2029 rather than 2027. Citi believes this later timeframe better represents a mature state of the company’s business model.
By 2029, Citi projects Rocket Lab’s revenue will grow to approximately $2.6 billion, driven by 20 Neutron launches per year and additional satellite construction contracts, particularly for U.S. government programs.
Citi continues to apply a 15x revenue multiple to derive its price target, resulting in a figure of roughly $72, which it then discounts back at Rocket Lab’s weighted average cost of capital (WACC) of 13% to arrive at the 12-month target of $50.
The updated model also incorporates approximately $50 million in annual revenues from Rocket Lab’s Geost acquisition, which is expected to close in the second half of 2025.
In other recent news, Rocket Lab USA has awarded a contract to Bollinger Shipyards for the construction of an ocean landing platform for its Neutron reusable rocket. The platform, named "Return On Investment," is under modification at Bollinger’s shipyard in Louisiana, with delivery expected in early 2026. This development is part of Rocket Lab’s efforts to support the Neutron rocket, which is designed to deliver payloads to space and return to Earth. Additionally, Cantor Fitzgerald reiterated an Overweight rating on Rocket Lab, maintaining a $35.00 price target, following recent successful launches from New Zealand. The firm highlighted Rocket Lab’s completion of 10 Electron launches in 2025, with plans to exceed 20 by year-end.
In another development, KeyBanc raised its price target for Rocket Lab to $40.00, citing growth momentum in the company’s Launch Services and Space Systems segments. KeyBanc also noted Rocket Lab’s successful integration of recent acquisitions and progress with the Neutron rocket. The firm believes Rocket Lab is well-positioned for a portion of the Space Development Agency’s upcoming contract, which could surpass the $515 million value of a previous contract. Furthermore, Rocket Lab’s advancements in manufacturing multiple Archimedes engines per month demonstrate its technical progress.
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