BofA reiterates Rocket Lab Buy, $115 target as Neutron debut nears

Bank of America reiterated its Buy rating on Rocket Lab with a $115 price target, calling Neutron's first flight the core valuation driver.

Launch revenue weakness is likely temporary, analyst Ronald Epstein at BofA Securities said, pointing to $437 million in new contracts.

Rocket Lab secured over $437 million in new launch contracts across its Electron, HASTE, and Neutron rockets during the second quarter and after quarter-end, pushing its total launch backlog beyond 90 missions. Second-quarter revenue rose 62 percent year-over-year to a record $234.06 million, beating the consensus estimate by $3.12 million. The company's contract backlog reached an all-time high of $2.36 billion, up 137 percent from a year earlier, with additional agreements signed after quarter-end adding more than $1 billion in new value for the third quarter alone.

Neutron, the reusable medium-class rocket designed to challenge SpaceX's Falcon 9, is expected to reach the launchpad in the fourth quarter. A successful debut would open larger payload markets with higher margins and accelerate Rocket Lab's path to profitability, according to Cantor Fitzgerald analyst Andres Sheppard, who raised his price target to $122 from $96. BofA's Epstein maintained his $115 target, while Needham reiterated a Buy with a $120 target and KeyBanc holds an Overweight with a $135 target.

Management has cautioned that the opportunity for a year-end launch is narrowing, with the inaugural flight potentially slipping into 2027. The company confirmed it continues targeting Q4 2026 for transporting Neutron to the launch facility but declined to guarantee a liftoff during that window.

The company guided third-quarter revenue of $250 million to $265 million, above the Street consensus of about $236 million. Rocket Lab also announced the acquisition of Iridium Communications, a move analysts said expands its total addressable market and adds free cash flow. Space Systems revenue rose 94 percent year-over-year, driven by SDA Tranche II and III contracts and the components business, while launch revenue increased 79 percent.

Rocket Lab shares traded near $80, up about 78 percent over the past year, giving the company a market capitalization of roughly $47 billion. The stock carries a consensus Buy rating with an average price target of $107.71, implying upside of more than 30 percent.

The reiterated Buy rating reflects institutional confidence in Rocket Lab's growth trajectory as Neutron's debut approaches. Investors will watch for a confirmed launch date, with management targeting pad arrival in Q4 2026 and the first flight expected to be the stock's biggest driver.

This article is for informational purposes only and does not constitute investment advice.