TLDR
- Morgan Stanley raised Rocket Lab’s price target from $20 to $68, citing the company as a publicly traded alternative to SpaceX
- Rocket Lab stock has gained 152% in 2025, trading around $67.80, with shares up over 7% in pre-market following the announcement
- The company leads the small launch market with its Electron rocket, having delivered 230+ satellites across 72 launches
- Neutron, Rocket Lab’s larger rocket expected to launch later in 2025, is seen as the next major catalyst for growth
- Morgan Stanley projects 41% compound annual revenue growth from 2025 to 2029, with positive free cash flow starting in 2027
Morgan Stanley raised its price target on Rocket Lab USA from $20 to $68, marking a substantial increase in confidence for the space launch provider. The brokerage maintains its Equal Weight rating on the stock.
Rocket Lab shares traded at $67.80 following the announcement, representing a gain of approximately 4% on the day. Pre-market trading showed even stronger momentum with shares climbing over 7%.
The stock has performed strongly throughout 2025, gaining about 152% year-to-date. This compares to an 11% rise in the S&P 500 over the same period.
Morgan Stanley analysts positioned Rocket Lab as an earlier-stage alternative to SpaceX in the commercial space launch market. The firm’s new valuation approach draws comparisons to SpaceX’s implied value.
SpaceX’s private market valuation has increased from approximately $100 billion in 2021 to around $400 billion currently. This growth trajectory serves as a reference point for evaluating Rocket Lab’s potential.
Current Operations and Market Position
Rocket Lab currently dominates the small launch sector through its Electron rocket system. The company has completed 72 launches and delivered more than 230 satellites to orbit.
The space systems division represents a fast-growing segment of Rocket Lab’s business. The company also plans to develop its own satellite constellation, similar to SpaceX’s Starlink network.
Neutron Rocket Development
The Neutron rocket represents Rocket Lab’s next major product launch. This larger rocket is scheduled for its first flight later in 2025.
Morgan Stanley forecasts one test launch in 2025 for the Neutron system. The brokerage expects the launch cadence to increase to 12 annual missions by 2029.
Reusability features in the Neutron design are expected to improve profit margins over time. Early launches will likely generate negative margins as the company refines its operations.
The initial Neutron launch is identified as the primary catalyst for near-term stock performance. Successful test flights could validate the company’s expansion strategy.
Morgan Stanley projects company-wide revenue to grow at a 41% compound annual rate between 2025 and 2029. The firm anticipates Rocket Lab will achieve positive free cash flow starting in 2027.
Investor interest in the space sector has increased due to limited publicly traded alternatives. This scarcity factor has contributed to Rocket Lab’s stock appreciation.
The brokerage noted execution risks associated with the Neutron program’s debut. These uncertainties factored into the decision to maintain an Equal Weight rating despite the higher price target.
Morgan Stanley analysts stated that much of the positive outlook appears reflected in current stock prices. The firm sees continued support from capacity shortages in the launch market and successful mission completions.
