Raymond James initiated coverage on Rocket Lab (RKLB) with an Outperform rating. Analyst Brian Gesuale established a price target of $80 for the stock. The firm highlighted the company's development of a vertically integrated and capital-efficient space platform.
Rocket Lab currently demonstrates rapid growth in both revenue and backlog. Raymond James projects the company will achieve positive adjusted EBITDA between 2027 and 2028. Free cash flow is also expected to turn positive during that same period.
The new Neutron rocket and the acquisitions of Iridium and Mynaric offer significant upside potential. However, execution risks remain regarding the commercialization of the Neutron rocket. The company also faces challenges integrating its recent acquisitions. Rocket Lab shares increased in pre-market trading following the announcement.