Shares of Rocket Lab USA, Inc. (RKLB) surged nearly 6% on November 11, 2024, after Stifel analyst Erik Rasmussen raised his price target on the stock by more than 50%, from $9 to $15 per share. The analyst's bullish outlook was driven by Rocket Lab's progress in developing its highly anticipated Neutron rocket and the significant growth potential in the satellite and satellite services market.
Rasmussen expressed "high-level conviction" that Rocket Lab will successfully bring the Neutron rocketship to market, potentially disrupting the medium-lift launch vehicle segment currently dominated by industry giants like SpaceX, United Launch Alliance, and Arianespace. The Neutron rocket, which was initially slated for a 2024 launch but has been pushed back to mid-2025, is expected to provide a competitive edge for Rocket Lab in securing U.S. government launch contracts.
Moreover, the analyst highlighted the company's well-positioned space systems business, which he believes could capitalize on the growing momentum in high-profile satellite programs. Rasmussen predicted a staggering $300 billion total worldwide market for satellites and satellite services, underscoring the immense growth potential in this sector. Notably, Rocket Lab's space systems business boasts gross profit margins nearly double those of its launch services, making it a key driver of future profitability.
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