Investing.com — Shares of Rocket Lab rose 6.5% after a strong update from Citi analysts, who raised their price target on the aircraft maker to $35, setting a new high on the Street. The revised target reflects Citi’s confidence in Rocket Lab’s growth trajectory, particularly after recent contract awards for the company’s Neutron launch vehicle.
Citi’s optimism is based on several key indicators that investors have been watching closely this quarter. These include expected award announcements, particularly from the US government, progress on Neutron development milestones and commercial prospects in the space systems segment. Analysts at Citi adjusted their valuation model, raising the price-to-sales multiple from 11.3 to 15, putting Rocket Lab in line with rivals in the fast-growing technology and defense sectors. The adjustment comes at a time when the Neutron launch vehicle is attracting significant attention, and the winning contracts boost the company’s revenue prospects.
Key debates surrounding Rocket Lab’s stock revolve around the timing of Neutron’s development milestones, the company’s ability to scale up in the satellite systems business and long-term capital intensity as it expands to offer a wider range of space services. Potential catalysts that could further impact the stock price include announcements related to Neutron development and order flow, particularly for the Launch segment.
Citi’s report also introduces projections for the year 2027 in their financial model for Rocket Lab. This forward-looking approach suggests a long-term vision of the company’s financial health and market position.
While Citi’s price target increase is a significant factor behind the stock’s rally, investors will continue to monitor Rocket Lab’s performance against those expectations and the company’s ability to meet its stated milestones and growth targets.
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