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On Tuesday, KeyBanc analysts raised the price target for Rocket Lab USA (NASDAQ:RKLB) stock to $29 from $28, while maintaining an Overweight rating. The decision reflects growing confidence in the company’s strategic moves and recent acquisitions. The stock has demonstrated remarkable performance, delivering a 514% return over the past year. According to InvestingPro data, analyst targets currently range from $16 to $35, with a consensus recommendation leaning towards Buy.
The analysts noted Rocket Lab’s ongoing efforts to vertically integrate and enhance its satellite constellation manufacturing capabilities. This includes the acquisition of Geost last week, which expanded Rocket Lab’s presence in the payload segment of satellites. The company aims to leverage this acquisition to capitalize on opportunities within the Defense sector, particularly in satellite constellations. With impressive revenue growth of 65% and a market capitalization of $12.27 billion, Rocket Lab has shown strong execution of its expansion strategy.
Rocket Lab is currently executing $515 million in tranche 2 contracts with the Space Development Agency (SDA). The acquisition of Geost is expected to strengthen the company’s position to potentially secure tranche 3 of the SDA contract, with announcements anticipated in October. The potential value of this contract could surpass the previous $515 million win.
The analysts also highlighted progress on Rocket Lab’s Neutron project, which remains on track for a launch in the second half of 2025. They expect the majority of the launch pad infrastructure to be completed in the coming months, further supporting the company’s growth trajectory.
The updated price target reflects KeyBanc’s increased confidence in Rocket Lab’s vertical integration initiatives, the projected timeline for Neutron’s first launch, and the potential for additional contract awards within the Space Systems division in the fourth quarter of 2025.
In other recent news, Rocket Lab USA has announced its acquisition of Geost LLC for $275 million, comprising $125 million in cash and potentially up to $150 million in Rocket Lab shares. This strategic move marks Rocket Lab’s entry into the satellite payload sector, enhancing its offerings in the space and defense industries. The acquisition is expected to be neutral to slightly positive for Rocket Lab’s adjusted EBITDA in the latter half of 2025. Following this announcement, Needham raised its price target for Rocket Lab shares to $32, maintaining a Buy rating, while Stifel increased its target to $34, also recommending a Buy rating. The acquisition of Geost, known for its electro-optical and infrared payloads, is anticipated to position Rocket Lab as a competitive player in the national security space market. The transaction has received board approval but awaits regulatory clearance, expected in the second half of 2025. Rocket Lab’s management has not disclosed specific GAAP financial metrics but anticipates the acquisition will bolster its capabilities in the space technology sector. The company aims to capitalize on new opportunities within national security applications through this acquisition.
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