Rocket Lab (RKLB) Stock Takes Off Following Analyst Upgrade

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Rocket Lab (NASDAQ:RKLB) already knows plenty about blasting off. Now, one analyst thinks RKLB stock is about to do exactly that. Specifically, investment bank Cowen has issued a bullish price target for shares, raising its price prediction from $6.50 to $8.

As Cowen sees it, Rocket has the potential to rise by 55% in the coming months as the company prepares to earn its place in the new space race. Cowen reiterated an “outperform” rating on RKLB, regarding shares as a “buy.” News of this upgrade sent the stock up to nearly $6 today, with shares closing 7% in the green.

In a sector where coverage often focuses on the space ventures of Elon Musk and Jeff Bezos, positive analyst coverage is paramount. But are investors likely to see the type of gains Cowen predicts? Let’s take a closer look.

RKLB Stock and the Road Ahead

For a company that doesn’t make too many headlines, Rocket Lab USA provides investors with plenty to love. As InvestorPlace contributor Ian Bezek notes, it’s a leader in reusable small launch rockets and “active in other areas such as building parts and systems for satellites.” All three of these segments are growing quickly — and demand will only accelerate as the race to space picks up.

Back in April, RKLB stock fell victim to macroeconomic headwinds alongside many of its peers. But if Cowen’s predictions are correct, today could be the opportune time to buy shares on the dip.

Rocket Lab is already slowly but surely building a reputation as a Wall Street favorite. Early in August, both Morgan Stanley and Stifel Nicolaus set bullish price targets of $12 per share and $15 per share respectively. Although Cowen hasn’t set as high of a price prediction, analyst Cai von Rumohr foresees impressive growth:

“We’re upgrading RKLB to Outperform for key execution milestones, an improved competitive position, and benefits from Russian sanctions.”

While RKLB doesn’t have too many analyst ratings on TipRanks, six out of seven analysts rate it as a “buy,” making for a collective “strong buy” rating. Von Rumohr also describes Rocket as an “an end-to-end merchant supplier of space systems” making it “the launch provider (after SpaceX) most likely to achieve financial success.”

As many electric vehicle (EV) producers already know, it’s hard to compete with a venture built by Elon Musk. But that doesn’t mean that Rocket Lab can’t carve out a lucrative niche in this growing market.

Earlier in August, RKLB stock shot up after reporting record second-quarter earnings. The company also forecast further revenue growth for the coming quarter. And, as InvestorPlace contributor Josh Enomoto notes, Rocket has done a better job of delivering on its promises than peers like Virgin Orbit (NASDAQ:VORB) and Astra Space (NASDAQ:ASTR).

On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Samuel O’Brient has been covering financial markets and analyzing economic policy for three-plus years. His areas of expertise involve electric vehicle (EV) stocks, green energy and NFTs. O’Brient loves helping everyone understand the complexities of economics. He is ranked in the top 15% of stock pickers on TipRanks.

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