By Kit Norton
Shares of Rocket Lab and Firefly Aerospace advanced before the opening bell on Monday after the space stocks received upgrades following the sharp sector selloff late last week on Elon Musk's SpaceX initial public offering debut.
KeyBanc Capital Markets analysts Michael Leshok and Liam Baker on Sunday upgraded both Rocket Lab and Firefly to Overweight from their previous Sector Weight, setting price targets of $135 and $50, respectively for the space stocks.
"Last Friday's record-setting SpaceX IPO sent ripple effects across our coverage of space-centric equities, with the sector selling off sharply on IPO day and over the weeks leading up to it," Leshok and Baker wrote.
"We think this is unwarranted and largely systematic in nature, as funds make room for the space behemoth," the analysts added.
Rocket Lab stock rose 4% to around $106.48 in premarket trading on Monday, set to recoup some of its 11% decline from Friday. Firefly shares advanced 5.4% to $33.60 before the opening bell. The stock sank 19% on Friday.
KeyBanc's price targets imply 32% upside for Rocket Lab stock and 57% upside for Firefly shares.
The space sector selloff was broad on Friday, even as SpaceX stock rose 19% from its IPO price to $160.95. Along with Rocket Lab and Firefly, AST SpaceMobile sank 16%. Intuitive Machines fell 13%, Voyager Technologies dropped 14%, and Redwire declined 12%. However, all those stocks were poised to make gains on Monday.
SpaceX also continued to advance, gaining more than 5% in premarket trade.
The macro drivers that drove the space sector's growth over the past two years have only accelerated, and are not contingent on whether SpaceX is a publicly traded company, according to the KeyBanc analysts.
Leshok and Baker noted that there are not enough rockets to meet demand and that the appetite for satellites continues to fuel the space economy. This growth isn't expected to slow down any time soon, according to the analysts.
KeyBanc sees Rocket Lab as the "clear" number two space play behind SpaceX and says the company "could achieve a similar growth trajectory" soon.
"SPCX's premium valuation shows the value of having in-house access to space and the myriad of potential end-use applications that come with that capability. We continue to expect these applications to evolve over time and believe RKLB is among the best positioned to adapt to the dynamic market given its satellite design/manufacturing and launch heritage, the analysts wrote.
Meanwhile, the firm believes Firefly Aerospace is among the top commercial space companies and that its exposure to the National Aeronautics and Space Administration's, or NASA, lunar base plans could yield long-term growth.
"Given supportive macro, budgets, and increasing institutional interest, we favor well-capitalized commercial space companies with idiosyncratic growth vectors aligned with national security and NASA priorities and enablers of the broader space ecosystem," Leshok and Baker wrote.
Write to Kit Norton at kit.norton@barrons.com
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(END) Dow Jones Newswires
June 15, 2026 08:31 ET (12:31 GMT)
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