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Investing.com - Morgan Stanley has lowered its price target on Firefly Aerospace Inc (NASDAQ:FLY) to $27.00 from $52.00 while maintaining an Equalweight rating on the stock. With shares currently trading at $22.95, the new target suggests approximately 18% upside potential. According to InvestingPro data, Firefly appears slightly undervalued based on its Fair Value assessment.
The significant reduction reflects recent setbacks for the company’s Alpha rocket program, including a failed commercial launch and the loss of a first-stage booster during ground testing. These setbacks have contributed to Firefly’s stock plummeting 62% over the past six months, though it has shown signs of recovery with a 19% gain in the past week.
The new price target applies a multiple of approximately 3.5x on projected 2027 sales of $967 million, representing a one-turn premium compared to space infrastructure and exploration peers, which trade at a median of about 2.3x EV/2027 sales.
Morgan Stanley’s previous $52 target had used a higher 9x multiple on 2027 sales of $756 million, which positioned Firefly at a premium to infrastructure peers but still at a discount to Rocket Lab (NASDAQ:RKLB), which trades at approximately 20x 2027 sales.
The firm notes that Firefly has conducted only six launches to date with mixed results (two successes, two partial successes, and two anomalies), compared to Rocket Lab’s track record of 74 launches with 70 successes, justifying a deeper discount for Firefly until it "reestablishes its footing with Alpha."
In other recent news, Firefly Aerospace has completed its acquisition of SciTec, Inc., a defense technology firm. This acquisition, finalized through a combination of cash and Firefly common stock, adds approximately 475 employees and six facilities to Firefly’s operations. Additionally, Firefly Aerospace secured a $10 million contract addendum from NASA for lunar data collection as part of the Blue Ghost Mission 1, which is part of NASA’s Commercial Lunar Payload Services initiative. Despite missing second-quarter sales and adjusted EBITDA estimates, Cantor Fitzgerald has reiterated an Overweight rating on Firefly Aerospace, with a $65 price target, citing potential growth in Defense and Civil markets. Roth/MKM has initiated coverage on Firefly Aerospace with a Buy rating and a $60 price target, highlighting the company’s strong position in the expanding space and national security market. Cantor Fitzgerald also initiated coverage with an Overweight rating, expecting significant growth in Firefly’s launch business, particularly with its Alpha and Eclipse rockets. These developments highlight Firefly Aerospace’s ongoing expansion and strategic growth initiatives.
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