Rocket Lab’s Bull Case Strengthens On Neutron Progress And Iridium Deal, Says Citizens – Firm Sees 98% Upside Potential For RKLB

• Citizens reiterated a ‘Market Outperform’ rating and a price target of $130.
• A successful launch later this year and proper execution of the planned missions would improve the stock’s valuation, the firm said.
• If the Iridium acquisition is completed, Rocket Lab would strengthen its presence in IoT, direct-to-device communications, positioning and safety-of-life services.

Rocket Lab (RKLB) is entering a potentially transformative phase as it prepares for the highly anticipated year-end debut of its reusable Neutron rocket, amid strong industry-wide launch demand, said Citizens as per a Street Insider report.

According to the report, Citizens reaffirmed its ‘Market Outperform’ rating and $130 price target, implying an upside potential of around 98% from current levels. The brokerage stated that the company is emerging as one of the strongest-positioned players in the commercial space sector.

At the time of writing, RKLB stock was down around 3% in pre-market trading and is also tracking its worst month since May 2022.

Neutron Success Would Allay Investor Concerns

Citizens said its industry channel checks during the Farnborough Airshow in the U.K. last week pointed to demand strength across the space launch ecosystem, with suppliers reporting growth across multiple business segments and launch volumes exceeding expectations.

The firm views the demand backdrop as a positive signal for Rocket Lab’s existing launch franchise and its expanding government and commercial opportunities.

Citizens added that a major part of the investment thesis is Neutron, and added that a successful launch followed by solid execution of booked missions could significantly reduce investor concerns around the program.

Last month, Rocket Lab’s CFO Adam Spice suggested that SpaceX’s increasing focus on Starlink, Starship and potential space-based data centers could make the broader merchant launch market less strategic for SpaceX over time, potentially creating a “very nice spot” for Neutron.

Iridium Deal Adds IoT, Direct-To-Device Communications To Rocket Lab’s Portfolio

The pending $8 billion acquisition of Iridium Communications (IRDM) adds another strategic dimension to Rocket Lab, stated Citizens. If completed, the deal would give Rocket Lab an immediate presence in IoT, direct-to-device communications, positioning and safety-of-life services, creating a more vertically integrated space company capable of designing, building, launching and operating its own satellite constellations.

The deal would combine Rocket Lab’s launch and satellite manufacturing capabilities with Iridium’s global communications network, L-band spectrum and recurring high-margin service revenue. L-band frequencies are a range of radio frequencies between 1 and 2 GHz and are used for mobile communications and navigation systems.

RKLB Order Book Grows

The optimism comes as Rocket Lab continues to build momentum with U.S. government customers. On Monday, the company secured a $266 million Space Force contract covering 12 suborbital launches and six additional launches tied to space-based missile defense missions. The award also includes the establishment of Rocket Lab’s fourth launchpad in Kodiak, Alaska, with operations expected to begin next year.

While Citizens acknowledges that Rocket Lab trades at a premium valuation relative to traditional aerospace peers, it argues that the premium is justified by the company’s unique combination of launch capability, vertical integration and expanding end-to-end space platform strategy.

RKLB Bulls Say Manufacturing Just As Important As Launch Success

Retail sentiment surrounding RKLB on Stocktwits remained ‘bullish’ over the past 24 hours.

One user said RKLB’s “manufacturing cadence matters just as much as launch success.”

Another user said the stock will shoot up to $100 as soon as “they prove Neutron.”

The stock is down nearly 12% so far this year, but has outperformed peer AST SpaceMobile (ASTS), which has slumped more than 30%.

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