MDA Space (MDA) is at the core of the emerging space ecosystem and its shares are a way for investors to get exposure to the space sector at an attractive valuation, RBC Capital Markets said.
The company's business model has "evolved significantly" in the last 12 months and investors are now focusing on the "timing of converting pipeline opportunities to backlog," the note said Friday.
RBC said that MDA is trading at just 3 times its expected 2027 revenues, while a peer set of Redwire (RDW) and Intuitive Machines (LUNR) is trading at 5 times expected 2027 revenues. MDA investors are also eyeing emerging opportunities in the US after the company's acquisition of Blue Canyon Technologies.
MDA is expected to close the Blue Canyon Technologies deal by early 2027, and it will then be well placed to leverage its Aurora satellite and other capabilities in the US market.
While MDA is a leading player in the Canadian defense market, where spending is expected to rise from about CA$63 billion ($45.42 billion) in 2025 to about CA$150 billion by 2035, "any success in the US market would be a positive for sentiment," according to the note.
RBC kept MDA's outperform rating and CA$60 price target.
Price: 35.78, Change: +0.56, Percent Change: +1.60
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