Intuitive Machines Stock Dips on Stifel Downgrade, Putting Pause on Rally

Intuitive Machines stock price (NASDAQ: LUNR) has moved lower in overnight trading into the pre-market session, with shares falling 3.87% following a downgrade from Stifel. The shift in rating reflects growing apprehension surrounding the imminent NASA Lunar Terrain Vehicle (LTV) contract announcement.

The stock's movement underscores the sensitivity of Intuitive Machines to developments related to its lunar ambitions. Stifel adjusted its rating from “Buy” to “Hold,” while paradoxically raising the price target from $18 to $20.

This seemingly contradictory move signals that while Stifel acknowledges the company's potential, it also recognizes heightened risks associated with the forthcoming NASA decision. The firm pointed to an “unpredictable political climate” as a source of uncertainty, suggesting that the most qualified bid may not necessarily win the competition.

With the stock price nearing Stifel's target, the firm sees a more balanced risk/reward scenario.

The NASA LTV contract represents a significant opportunity for Intuitive Machines. The company had previously secured a $30 million contract to conduct a feasibility assessment for the LTV as part of the Artemis program. Intuitive Machines' Moon RACER team, collaborating with industry giants such as Boeing and Northrop Grumman, has been developing a roadmap for deploying the LTV using the company's Nova-D cargo-class lunar lander

The LTV is envisioned to play a crucial role in lunar exploration, facilitating the transportation of astronauts and equipment across the Moon's surface. Intuitive Machines submitted its proposal for the next phase of NASA's LTV Services contract in August 2025, aiming to build, fly, and operate the Moon RACER vehicle on the Moon. NASA is expected to announce the LTV delivery and demonstration award by the end of 2025.

The market's reaction to Stifel's downgrade underscores the high stakes surrounding the NASA LTV contract. While Intuitive Machines has made notable strides in securing contracts and bolstering its financial standing, the outcome of the LTV contract and its subsequent impact on future growth remain paramount. After a rally of 68.35% over the past month alone, a 3.87% pullback may be unlikely to deter bulls, yet the latest note raises a few questions.