TLDR
- Wall Street bank Morgan Stanley upgrades space sector outlook to “Attractive” for 2026 after strong 2025 performance
- Rocket Lab stock upgraded to Overweight with price target jumping to $105 from $67
- MDA Space receives Overweight rating with price target increased to $46 from $32
- Iridium downgraded to Equal-weight as price target drops to $24 from $37
- Launch frequency increases and government policy support expected to fuel sector growth
Morgan Stanley has raised its outlook on the space technology sector for 2026. The investment bank now rates the industry as “Attractive” following a strong year of performance in 2025.
The upgrade comes from analyst Kristine Liwag and her team at Morgan Stanley. Liwag carries a five-star analyst rating with a 66% success rate on her stock picks.
The bank made several rating changes to individual space companies. Rocket Lab and MDA Space both received upgrades while Iridium was downgraded in the latest analyst moves.
Rocket Lab saw its rating move to Overweight from the previous level. The price target jumped significantly to $105 per share from the prior $67 target.
MDA Space also earned an Overweight rating from Morgan Stanley. The Canadian space technology firm’s price target rose to $46 from $32 per share.
Space Sector Growth Drivers
Morgan Stanley points to multiple factors supporting space stocks this year. Higher launch cadences will increase as rocket companies expand operations. New product launches are scheduled across the industry.
Government policy support provides a favorable backdrop for commercial space firms. The U.S. maintains supportive regulations for the growing sector. Market maturation continues as the industry evolves beyond early development stages.
Launch activity hit record levels in 2025 across the space industry. Satellite deployments accelerated throughout the year. Commercial contracts grew as companies moved beyond reliance on government business.
Rocket Lab has key milestones planned for 2026. The company expects to complete the first launch of its Neutron rocket in early 2026. Electron rocket launch frequency will also increase this year.
Individual Stock Outlooks
MDA Space currently trades at a discount to space sector peers. Morgan Stanley analysts believe this valuation gap presents an opportunity. Strong potential exists for the stock to revalue higher in 2026 according to the bank.
The analysts cite improved risk-reward dynamics for Rocket Lab stock. A clear path of catalysts lies ahead for the company. The Neutron rocket debut represents a major expansion of launch capabilities.
Iridium received a downgrade to Equal-weight from Morgan Stanley. The satellite communications company is executing a strategic business pivot. The analysts point to uncertainty in the early phases of this transition.
AST SpaceMobile and Intuitive Machines also operate in the space sector. Both companies posted strong gains during 2025. The commercial space market continues expanding beyond traditional aerospace contractors.
SpaceX remains the largest private company in the industry. The firm led by Elon Musk could potentially go public in 2026. An initial public offering would mark a major milestone for commercial space.
The space industry achieved record performance across multiple areas in 2025. Launch tempo increased as companies scaled operations. Supportive U.S. policy and rising commercial demand position the sector for continued growth in 2026.
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