The biggest stock debut in history should have lifted anything with a rocket on it. It did the opposite. SpaceX went public on Friday, and the other rocket stocks fell.
SpaceX jumped about 19% on day one. It closed at $161 and landed near a $2.1 trillion value. That made it the largest IPO ever. The sale also raised about $75 billion for the firm.
You would expect that to lift the whole group. Instead, investors did the reverse. They sold smaller names like Rocket Lab and Firefly Aerospace. The logic was simple: why own the little guys when you can finally own the giant?
KeyBanc thinks that got it backwards. The bank called the selloff "unwarranted and largely systematic." In plain terms, traders dumped the group on reflex. Nothing about the businesses had actually changed.
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The bank upgraded both stocks to overweight, which is its word for "buy." It set a $135 target on Rocket Lab and a $50 target on Firefly. A price target is just where an analyst sees a stock in a year.
The case rests on a simple gap. SpaceX will soon use most of its own rockets for its own missions. Its workhorse Falcon 9 is set to wind down as the bigger Starship takes over.
Picture the only moving company in town. Now it hauls nothing but its own furniture. Everyone else with a truck suddenly has work. That open lane is the mid-size launch market. Rocket Lab's new Neutron rocket is built for it.
Rocket Lab also sits on a backlog worth more than $2.2 billion. It even has a pending Mars contract estimated near $700 million. The stock is not cheap. It trades near 50 times forward sales. KeyBanc still calls the price fair. It sees Rocket Lab as the clear No. 2 launch provider.
Firefly leans elsewhere, on its Blue Ghost lander. That craft is the only commercial one to land on the Moon cleanly. It also just won a $75 million Moon contract for its Elytra vehicle. NASA wants a Moon landing every month from 2027, which would feed Firefly more work.
Rocket Lab joins the Nasdaq-100 on June 22. That move tends to pull in buyers who track the index. Neutron's first launch is due later this year. A clean debut would do more for the stock than any analyst note.
There is a bigger backdrop too. The bank also flags a proposed $1.07 trillion U.S. defense budget, with about $56 billion aimed at space. For now the giant grabbed the headlines while the small players got cheaper. KeyBanc is betting that gap does not last.
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