MDA Space (MDA) sentiment is expected to benefit from its share repurchase plan, CSG's strategic investment, progress on pending acquisitions and continued backlog execution, RBC Capital said in a Sunday note.
The company has authorized the repurchase of 8.1 million shares, or about 5% of its outstanding shares, which RBC said is an "opportunistic" move to support the stock. The 9.5% stake acquired by Czech arms maker CSG could expand MDA's European presence and create opportunities in the space and defense sectors in Eastern Europe, though the longer-term benefits remain unclear.
RBC sees strategic value in MDA's pending Blue Canyon and CLS acquisitions, expected to close by year-end 2026 or early 2027, but has excluded them from its estimates. The brokerage also trimmed its 2027 Telesat Lightspeed revenue assumptions due to timing while noting potential upside in 2028 from additional funding.
Coming off its 2021 IPO, MDA has had success in winning new
business and has built a roughly $4 billion backlog, RBC said. Backlog execution, new contract wins and planned capacity expansion will likely be key drivers of investor sentiment, the analysts said.
RBC maintained its outperform rating on the stock while lowering its price target to CA$55 ($39) from CA$60.
Price: 28.01, Change: -0.21, Percent Change: -0.74
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