This Analyst Just Upgraded Rocket Lab Stock. Here's Why.

Rocket Lab (RKLB) shares opened in the green this morning after a senior KeyBanc analyst issued a bullish note in favor of the aerospace manufacturer and launch service provider. 

In his research note, Michael Leshock upgraded RKLB to “Overweight,” setting his price target at $135, which signals potential upside of more than 30% on the firm’s previous close. 

As of writing, Rocket Lab stock is down about 27% versus its year-to-date high in late May.

KeyBanc’s Bull Case for Rocket Lab Stock

RKLB shares and other space names recently faced an intense selloff as SpaceX made its historic debut on Nasdaq — weakness that Leshock framed as unwarranted in his research note. 

As institutional funds scrambled to reallocate capital and carve out a sizable position for the newly public aerospace titan, existing space holdings like Rocket Lab were systematically liquidated.

KeyBanc views this asset rotation-driven pullback in RKLB as a buying opportunity, especially given the firm’s strong fundamentals. 

Plus, the macro growth drivers for the space sector remain incredibly tight — an enduring structural shortage of launch capacity is poised to leave that market heavily undersupplied for over a decade, the investment firm added. 

What Else Makes RKLB Shares Attractive?

According to the KeyBanc analyst, the demand for satellite constellations and rising defense spend (worldwide) on space systems make up for additional reasons to own Rocket Lab shares.  

RKLB is insulating itself from standard small-launch vulnerability, with a true vertical integration model that mirrors SpaceX’s long-term trajectory, he noted. 

With roughly 90 successful Electron missions under its belt and enhanced operational transparency surrounding its medium-lift Neutron program, the company is demonstrating “institutional-grade” execution.

Rocket Lab ended its Q1 with a backlog exceeding a whopping $2.2 billion and is well-positioned for high-profile contracts, including NASA’s Mars Telecommunications Orbiter program.

Note that RKLB is set to join the Nasdaq-100 Index on June 22 — a key development that may boost bullish momentum as passive funds and ETFs are forced to load up on it. 

Wall Street Remains Bullish on Rocket Lab

Wall Street more broadly also remains constructive in Rocket Lab, viewing it as a clear No. 2 (after SpaceX) in the commercial space sector. 

The consensus rating on RKLB stock sits at “Moderate Buy” currently, with price targets as high as $150, indicating potential for another 37% upside from here.