By Kit Norton and Al Root
Shares of Rocket Lab and Firefly Aerospace advanced 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 analyst Michael Leshock on Sunday upgraded both Rocket Lab and Firefly to Overweight (Buy) from the previous Sector Weight (Hold), setting price targets of $135 and $50, respectively, for the space stocks.
Rocket Lab rose 6.7% to $109.25 on Monday, clawing back some of its 11% drop from Friday. Firefly advanced 4.7% to $33.36, after sinking 19% on Friday.
KeyBanc's price targets imply better than 23% upside for Rocket Lab and almost 50% upside for Firefly, relative to Monday's close.
"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," Leshock wrote. "We think this is unwarranted and largely systematic in nature, as funds make room for the space behemoth."
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 advanced on Monday.
SpaceX also continued to move higher, gaining 5.6% in early trading.
"It's been a great June for space investors, but that was felt only if you held shares of SpaceX and SpaceX only," wrote Fundstrat economic strategist Hardika Singh on Monday.
Coming into Monday trading, shares of Rocket Lab, Firefly, and AST were down an average of 29%, despite SpaceX's successful IPO. Shares of EchoStar were down 12%, despite owning about 2% of SpaceX stock, which it got by selling wireless spectrum to Elon Musk's rocket company.
"Over the past year, investors had heavily bought into space...But over the past month, they've been obliterated by investors selling their winners to raise cash in favor of the real deal," added Singh.
Still, the broad drivers driving the space sector's growth over the past two years have only accelerated, and aren't contingent on whether SpaceX is a publicly traded company, according to KeyBanc.
Leshock notes 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. He calls Rocket Lab the "clear" number two space play behind SpaceX and says the company "could achieve a similar growth trajectory" soon.
"SpaceX'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 Rocket Lab is among the best positioned to adapt to the dynamic market given its satellite design/manufacturing and launch heritage," Leshock added.
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.
Despite recent declines, shares of Rocket Lab and AST were up about 575% and 115%, respectively, over the past 12 months heading into Monday trading. SpaceX has led to some extra volatility, but it's also created the industry that is driving shares higher.
Write to Kit Norton at kit.norton@barrons.com and Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 18, 2026 13:16 ET (17:16 GMT)
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