Rocket Lab Stock (NASDAQ: RKLB) Set For New High – Analysts Raise Price Targets

Rocket Lab's stock price (NASDAQ: RKLB) is set to open at new highs again today, with RKLB up 2.5% in the pre-market, having hit a new high on Wednesday's session at $48.07.

Trading at $48.68 pre-market, the stock has surged nearly 20% in the past week, and an impressive 80% in the past month. This has come on the back of a potent combination of bullish analyst upgrades, anticipation surrounding the upcoming Neutron rocket launch, and speculation about lucrative government contracts.

This surge in valuation comes despite some lingering concerns about potential NASA budget cuts, showcasing the market's strong confidence in Rocket Lab's long-term prospects. The stock's impressive performance, up over 770% in the last year, has captured the attention of both seasoned investors and those new to the space sector.

The driving force behind this bullish sentiment is multifaceted. The impending launch of the Neutron rocket, slated for the second half of 2025, is a major catalyst. This medium-lift launch vehicle is poised to significantly expand Rocket Lab's capabilities, allowing it to compete for larger and more complex missions, including those under the U.S. Space Force's National Security Space Launch (NSSL) Phase 3 Lane 1 program.

This program alone could be worth up to $5.6 billion over five years, representing a substantial revenue opportunity for the company. Moreover, securing a multi-launch agreement with a confidential commercial satellite constellation operator further validates the Neutron's market appeal and provides a solid foundation for future revenue streams.

Adding fuel to the fire are recent analyst upgrades from prominent financial institutions.

Both Bank of America and Citi have raised their price targets to $50, reiterating their “Buy” ratings on the stock in the past couple of days. These analysts cite the Neutron rocket's potential, the company's expanding satellite business, and its strategic partnerships as key drivers of long-term growth.

Citi, in particular, highlighted the securing of a launch customer for Neutron as a pivotal milestone, demonstrating market acceptance and strengthening the business case for the new launch vehicle.

Such rally's do bring amplified risk. The stock's rapid ascent has pushed its valuation to historically high levels, raising concerns about a potential correction. While the long-term outlook remains positive, short-term volatility is likely, particularly as the company navigates the complexities of bringing the Neutron rocket to market. Furthermore, potential budget cuts at NASA, while seemingly offset by the prospect of government contracts, could still impact certain segments of Rocket Lab's business.

While the long-term outlook remains promising, investors should be mindful of the elevated valuation and potential volatility as the company executes on its key milestones.