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On Friday, RBC Capital adjusted its outlook on MDA Space Ltd (MDA:CN) (OTC: MDALF) shares, raising the price target to Cdn$20.00 from Cdn$18.00, while reiterating an Outperform rating. The revision follows Telesat's (TSAT) completion of funding agreements with the Canadian Government, securing the full $2.5 billion for the Telesat Lightspeed program. MDA, as the prime satellite contractor, has recorded $2.1 billion from this program in its backlog.
MDA recently commenced the expansion of its satellite production facilities, which is anticipated to double the company's manufacturing capacity. This development is seen as a significant step for MDA, boosting the company's potential to increase revenue within its Satellite Systems segment.
The RBC Capital analyst highlighted the importance of the agreements and facility expansion, noting that these milestones are expected to positively influence MDA's revenue trajectory. With the Lightspeed program funding in place and the facility expansion underway, MDA is considered to be in a strong position to secure additional satellite contracts.
The analyst from RBC Capital expressed confidence in MDA Space's market position and prospects, stating, "We believe MDA Space is well positioned for incremental satellite contracts. We are maintaining our OP rating and increasing our PT to $20." This statement underscores the firm's positive stance on the company's future performance and its decision to raise the price target.
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