Space stocks got a vote of confidence Sunday as KeyBanc Capital Markets upgraded both Rocket Lab Corp. (NASDAQ:RKLB) and Firefly Aerospace (NASDAQ:FLY) to Overweight, calling the post-SpaceX IPO selloff a buying opportunity rather than a signal of structural weakness.
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Analyst Michael Leshock established a $135 price target on RKLB, implying 26% upside from current levels, while FLY’s $50 target carries 48.5% upside.
The note argues the SpaceX (NASDAQ:SPCX) IPO-related pressure on space equities was “largely systematic in nature” as funds made room for the newly public megacap — and not a reflection of deteriorating fundamentals.
KeyBanc sees the same structural tailwinds intact: exponential satellite constellation growth, a chronically undersupplied launch market and a proposed U.S. defense budget of $1.07 trillion that earmarks $56 billion for space-based systems, nearly double this year's levels.
Rocket Lab Bull Case
For Rocket Lab, KeyBanc’s bull case centers on Neutron, the company’s forthcoming medium-lift rocket, set for its debut launch later this year.
With Falcon 9 slated to sunset as Starship scales and much of SpaceX’s own capacity consumed internally, Leshock sees a wide-open medium-lift market where Neutron could capture tens of billions in annual revenue.
Rocket Lab's backlog of more than $2.2 billion as of Q1, along with a pending Mars Telecommunications Orbiter contract estimated at $700 million, adds near-term catalysts. The stock will also join the Nasdaq-100 on June 22.
At roughly 50 times forward price/sales on FY27 estimates, shares trade above their historical ~40 times average, but KeyBanc’s $135 target implies ~67 times — a premium it says is warranted given RKLB’s vertical integration and positioning as the clear No. 2 commercial launch provider.
Firefly Bull Case
KeyBanc pegs Firefly’s upgrade to its unique NASA leverage.
The company’s Blue Ghost lunar lander stands as the only commercial vehicle to achieve a fully successful Moon landing, putting Firefly in position for future Commercial Lunar Payload Services awards as NASA aims for a monthly lander cadence starting in 2027.
A freshly awarded $75 million MoonFall contract for its Elytra spacecraft prompted modest FY26/FY27 estimate bumps from the firm.
Firefly's SciTec missile tracking software adds a defense angle — SciTec tracked roughly 1,000 missiles in the first 30 days of the Iran conflict — and the stock’s ~6.5 times FY27 price/sales sits at the low end of a 5-15 times peer range that KeyBanc views as unwarranted.
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