Rocket Lab Soars as Morgan Stanley Triples Price Target to $68

Shares of Rocket Lab USA, Inc. (NASDAQ: RKLB) surged on Monday following a significant price target revision from Morgan Stanley, which more than tripled its valuation estimate for the launch provider to $68 from a previous $20. The move signals growing confidence on Wall Street that Rocket Lab is carving out a crucial role as a 'fast-follower' to industry behemoth SpaceX.

While maintaining an 'Equal-Weight' rating, the firm's analyst Kristine Liwag outlined a valuation framework that increasingly views Rocket Lab as the primary public market avenue for investors seeking exposure to the burgeoning space economy, an area largely dominated by privately held SpaceX. The upgraded target sent shares climbing 5.6% in early trading, adding to a stellar 168% year-to-date rally for the company.

The core of Morgan Stanley's thesis rests on Rocket Lab's strategic parallels to SpaceX's own growth trajectory. This includes scaling up its rocket lift capacity, pioneering booster reusability with its Electron rocket, and developing its own satellite constellation. , a sentiment echoed in the analyst note.

Investors are closely watching the development of Rocket Lab's new, larger Neutron rocket, which is expected to enter service at a time of constrained global launch capacity. , applying a baseline discount to account for execution risks associated with the Neutron's development and the company's satellite ambitions. The firm's model projects a steady ramp-up in launch cadence for both the established Electron vehicle and the forthcoming Neutron.

This significant analyst upgrade follows a period of strong performance for the stock. Over the past year, Rocket Lab has outpaced the broader US Aerospace & Defense industry with a return exceeding 600%. , underscoring the high expectations now being priced into the shares as it solidifies its position as a leader in the small-launch market and a serious contender in the wider space industry.