Rocket Lab Gains Momentum as Citi Raises Price Target Amid Space Race

NEW YORK, NY – Citi has raised its price target for Rocket Lab (NASDAQ: RKLB) to $35 from $22, maintaining a Buy rating on the stock as part of its Q4 earnings preview for the aerospace and defense sector. The firm anticipates positive commentary from commercial aftermarket suppliers and defense contractors, citing growing demand from Europe and cautious optimism in the U.S. amid the presidential transition.

Rocket Lab, a New Zealand-U.S. aerospace company, has emerged as a key player in the space industry, challenging SpaceX‘s dominance. In 2024, Rocket Lab increased its launch cadence by 60%, from 10 launches in 2023 to 16. While SpaceX completed a record 138 launches in 2024, Rocket Lab’s growth rate outpaced SpaceX’s 41% increase, signaling its potential to compete in the small satellite launch market.

“The defense stock selloff looks overdone,” Citi analysts noted, emphasizing that investors have become overly cautious about defense spending. The firm also expects positive demand trends for business jets and space-related companies, further bolstering Rocket Lab’s outlook.

Rocket Lab’s Electron rocket, with a maximum payload of 320 kg and an average launch cost of $8.4 million, offers a competitive alternative for small satellite launches. While SpaceX’s Falcon 9 remains the industry leader, Rocket Lab’s dedicated launch services and tailored customer experience provide a niche advantage. Payload Research highlighted that SpaceX’s Falcon 9 often carries less than 3.4 tons of payload on commercial missions, charging nearly $21,000 per kilogram, compared to Rocket Lab’s $26,000 per kilogram.

Looking ahead, Rocket Lab plans to introduce its Neutron rocket later this year, priced at $50 million to $55 million. With a payload capacity of 13 tons, Neutron could offer a cost-effective alternative to SpaceX’s Falcon 9 for medium-sized payloads. “This should be an easy choice for many customers,” analysts noted, predicting that Rocket Lab’s innovations could drive significant investor returns.

As of January 17, 2025, Rocket Lab’s stock price stood at $24.00, reflecting a market cap of $12 billion. Despite a 2.6% decline that day, the company’s long-term prospects remain strong, fueled by its growing launch cadence and competitive pricing strategy.