SpaceX’s blockbuster initial public offering will boost a pair of aerospace technology stocks amid a broader acceleration in the space sector, according to KeyBanc Capital Markets. The bank upgraded Firefly Aerospace and Rocket Lab from sectorweight to overweight. KeyBank set a price target of $50 for Firefly stock, implying a 57% upside from Friday’s closing price, and a $135 price target for Rocket Lab stock, suggesting a 32% upside from its previous closing price. “Given the volatility surrounding the SPCX IPO, we see attractive opportunities across the rapidly growing space sector,” KeyBanc analyst Michael Leshock said in a report to clients on Sunday. “Given supportive macros, budgets, and growing agency interest, we favor well-capitalized commercial space companies with distinct growth vectors that align with national security and NASA priorities and enable the broader space ecosystem.” SpaceX shares began trading on the Nasdaq on Friday, soaring 19%, valuing the Elon Musk-led rocket maker at $2.1 trillion. This was the largest initial public offering in history. But on the same day, the iShares U.S. Aerospace & Defense ETF fell about 1%, with several aerospace stocks plummeting. Rocket Lab, for example, is down nearly 11%, and Firefly stock is down 19%. But KeyBanc says both companies are likely to rebound as institutional investor interest in aerospace businesses and their stocks grows, as evidenced by SpaceX’s IPO. “While NASA activities are accelerating at a pace not seen since the Apollo era, launch supply remains structurally constrained… amid rapid growth in satellites and space-based applications,” Leshock wrote. KeyBanc’s call is consistent with Wall Street consensus. Eight of the 10 analysts covering Firefly rate the stock a “buy” or “strong buy,” and 17 of the 22 analysts covering Rocket Lab similarly rate the stock as a “buy” or “strong buy.” Firefly is down 21% in the past month but is up 57% in the past six years since going public last August, while Rocket Lab is down 18% in the past month but up 85% in the past six months. Rocket Lab went public at the end of 2020.
