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Rocket Lab shares have the potential to take off, according to Bank of America. Analyst Ronald Epstein reiterated his buy rating on the space stock while shaving his price target down by $2 to $10. Epstein’s new price target implies the stock could soar 134.2% from Monday’s close. “We continue to see Rocket Lab … as the strongest pure-play space name within our coverage despite the recent Electron anomaly,” Epstein said in a note to clients Monday. After investigating the September mid-flight failure of its Electron rocket, Rocket Lab is aiming to get its launch business back on track by the end of the year. Bank of America’s Epstein noted Rocket Lab’s launch business is poised to “bounce back” next year, with 22 Electron missions slated for 2024. While Rocket Lab has been aiming to launch its next-generation Neutron rocket for the first time next year, Epstein doesn’t expect that vehicle to debut until 2025. “While development continues at a steady pace, we believe it may be difficult to achieve our prior target of two Neutron launches by end of 2024,” Epstein wrote. Rocket Lab’s space systems business has been ramping up for the first delivery under its contract for space tech company MDA , which is valued at $143 million, in the first quarter of 2024. Epstein said that the deal should contribute $100 million to revenue throughout 2024, making it Rocket Lab’s largest single contract. The analyst’s price target cut followed a reassessment of the discount rate following the Electron launch snafu. Still, he said the company’s 2023 loss per share should be narrower than previously anticipated as lower operating expenses and a higher share count outweigh margin softness. — CNBC’s Michael Bloom and Michael Sheetz contributed to this report
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