Space Technology Stocks like Rocket Lab Get Major Boost from Morgan Stanley

TLDR

• Morgan Stanley raises space technology sector rating to “Attractive” for 2026 after record 2025 performance
• Rocket Lab upgraded to Overweight with new $105 price target, up from previous $67
• MDA Space gets Overweight rating as price target increases to $46 from $32
• Iridium receives downgrade to Equal-weight with price target reduced to $24 from $37
• Increased rocket launches and U.S. policy backing expected to drive sector gains

Morgan Stanley has upgraded its rating on the space technology sector to “Attractive” for 2026. The move follows strong industry performance throughout 2025 across multiple metrics.

Analyst Kristine Liwag leads the Morgan Stanley research team covering space stocks. She holds a five-star rating and maintains a 66% success rate on stock recommendations.

The investment bank adjusted ratings on three major space companies. Two firms received upgrades while one was downgraded in the latest research update.

Rocket Lab earned an upgrade to Overweight in the analyst report. The price target surged to $105 per share from the earlier $67 forecast.

Rocket Lab USA, Inc., RKLB

MDA Space also received an Overweight rating from the bank. The space technology company’s price target climbed to $46 from the previous $32 level.

Key Factors Behind Space Sector Upgrade

Morgan Stanley identifies several catalysts supporting space stocks in 2026. Launch frequency will increase as rocket companies scale their operations. New products will debut across the industry this year.

U.S. government policy continues supporting commercial space development. Regulatory frameworks remain favorable for private sector growth. The market is maturing as the industry moves past early stages.

The space sector posted record launch numbers in 2025. Satellite deployment rates increased throughout the year. Commercial revenue grew as companies diversified beyond government contracts.

Rocket Lab has important milestones approaching in 2026. The first Neutron rocket launch is scheduled for early this year. The company will also boost Electron rocket launch rates.

Company-Specific Rating Changes

MDA Space trades below valuations of comparable space firms. Morgan Stanley sees this discount as too large given the company’s prospects. The stock has strong potential to revalue higher this year.

Rocket Lab shows improved risk-reward characteristics according to the analysts. Multiple catalysts will emerge for the company in 2026. The Neutron rocket launch marks a major capability expansion.

Iridium was downgraded to Equal-weight by Morgan Stanley. The satellite operator is shifting its business strategy. Uncertainty exists in the early stages of this strategic change.

Other space companies like AST SpaceMobile and Intuitive Machines also participated in 2025 gains. The commercial space market extends beyond traditional defense contractors. Private sector activity continues expanding across the industry.

SpaceX dominates as the largest private space company. Elon Musk’s firm may pursue an initial public offering in 2026. Such a move would represent a watershed moment for commercial space.

The space industry delivered exceptional results across key areas in 2025. Companies increased operational tempo and launch rates throughout the year. Record activity levels and supportive policy set the stage for continued expansion. Morgan Stanley expects these trends to drive space stock performance through 2026 as the sector matures and commercial opportunities multiply.

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