Rocket Lab (RKLB) Stock: Morgan Stanley Upgrades to Buy with $105 Price Target

TLDR

• Morgan Stanley upgraded Rocket Lab (RKLB) to Overweight/Buy, raising the price target from $67 to $105, sending the stock up 6.1% on Friday
• The space company posted record Q3 revenue of $155 million and grew its backlog to $1.1 billion while completing 21 successful Electron launches in 2025
• Rocket Lab won an $816 million Space Development Agency contract for missile-warning satellites and secured NASA validation for its upcoming Neutron rocket
• The stock surged 291% in 2025, though it trades at 85-times forward sales while still posting operating losses of roughly $59 million per quarter
• Neutron’s first launch is scheduled for Q1 2026, marking the company’s entry into the capacity-constrained medium-lift rocket market currently dominated by SpaceX

Rocket Lab stock climbed 6.1% on Friday after Morgan Stanley analyst Kristine Liwag upgraded the space launch provider to Overweight from Hold. The new price target of $105 represents a 57% increase from the previous $67 target.

Rocket Lab USA, Inc., RKLB

The upgrade reflects growing recognition of Rocket Lab as a strategically important space company with multiple revenue streams. Liwag, a five-star analyst, pointed to consistent launch execution and credible entry into the medium-lift market as key factors.

The space sector saw broad gains following Morgan Stanley’s bullish stance. AST SpaceMobile jumped 14.3% while Intuitive Machines rose 10.7%.

Rocket Lab wrapped up 2025 with 21 successful Electron launches and deployed 245 satellites to date. The company posted record third-quarter revenue of $155 million, up from $104.8 million in the prior year period.

The backlog now stands at $1.1 billion across both launch services and space systems divisions. Gross profit reached $57.3 million with a 37% margin in Q3.

Major Defense Contract Wins

The company secured an $816 million Space Development Agency contract to develop 18 missile-warning and tracking satellites. Total contract value could reach $1 billion with additional options.

This win demonstrates Rocket Lab’s ability to compete against established defense contractors. Morgan Stanley expects the SDA contract to improve positioning for future Golden Dome opportunities.

The U.S. Space Force added Neutron to its NSSL Phase 3 Lane 1 launch vehicle list with an initial $5 million task order. NASA also expanded Rocket Lab’s role under its VADR contract vehicle.

Kratos selected Rocket Lab to support the MACH-TB 2.0 hypersonic test launch for the Department of Defense. That program carries a $1.45 billion valuation with launches scheduled for Q1 2026.

Neutron Rocket Targets 2026 Launch

Neutron represents Rocket Lab’s entry into the medium-lift market currently dominated by SpaceX’s Falcon 9. The reusable rocket focuses on constellation deployment and cargo missions.

First launch is scheduled for Q1 2026 pending final qualifications. The rocket aims to support mega-constellation deployment and deeper-space use cases.

Wall Street maintains a Moderate Buy rating on the stock with seven Buy ratings and three Hold ratings. The average price target of $76.63 sits below current trading levels after the 291% surge in 2025.

Operating losses remain a concern at roughly $59 million per quarter for the past three quarters. Operating expenses totaled $116.3 million in Q3, driven by $70.7 million in R&D spending and $45.6 million in selling and administrative costs.

The stock trades at 85-times forward sales with a market cap exceeding $51 billion. CEO Peter Beck highlighted alignment with defense programs like Golden Dome and Space Development Agency constellations.

The global space economy could reach $1.8 trillion by 2035 according to the World Economic Forum. Growth is driven by satellite demand for broadband connectivity, Earth observation, and data workloads moving into orbit.

AST SpaceMobile secured a prime contractor position on the Missile Defense Agency’s SHIELD program, sending its stock up nearly 70% over the past month. The Golden Dome missile defense project continues to drive investor interest across defense-space stocks.

Rocket Lab has deployed hardware supporting over 1,700 missions to date through its space systems division. The company offers configurable spacecraft platforms and critical satellite components beyond its launch services.

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