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Investing.com -- Morgan Stanley raised its price target on Rocket Lab USA to $68 from $20, saying the launch provider is emerging as a publicly traded alternative to Elon Musk’s SpaceX and should benefit from strong demand for space capacity.
Rocket Lab shares are up about 4% at $67.8
The brokerage reiterated its Equal Weight rating but said investor interest in the sector and scarcity of listed space companies have pushed Rocket Lab’s shares sharply higher.
The stock has gained about 152% so far in 2025, compared with an 11% rise in the S&P 500.
“RKLB, in our view, is an earlier-stage alternative to SpaceX, and our new valuation construct takes cues from SpaceX’s implied value,” the analyst at Morgan Stanley.
SpaceX’s private valuation has surged from about $100 billion in 2021 to around $400 billion today.
Rocket Lab is currently the market leader in small launches through its Electron rocket, with more than 230 satellites delivered across 72 launches.
The company’s larger Neutron rocket, expected to fly for the first time later this year, is seen as the next major catalyst. Morgan Stanley forecast one test launch in 2025, followed by a ramp-up to 12 annual missions by 2029 as reusability improves margins.
The brokerage also highlighted Rocket Lab’s fast-growing space systems division and plans for its own satellite constellation, mirroring SpaceX’s expansion into Starlink.
While it expects Neutron to generate negative margins early on, it projects company-wide revenue to grow at a 41% compound annual rate from 2025 to 2029, with positive free cash flow beginning in 2027.
Despite the higher valuation, Morgan Stanley kept its rating at Equal Weight given execution risks tied to Neutron’s debut.
“Much appears priced in today,” the analysts said, though they see continued tailwinds from capacity shortages and incremental mission successes.