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Rocket Lab Receives Buy Rating from Citi Rocket Lab Receives Buy Rating from Citi

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Investors seem to be betting big on Rocket Lab as Citi issued a Buy rating for the Long Beach-based company. The firm’s reiteration of coverage on Monday served to buoy the market, casting a vote of confidence in Rocket Lab’s trajectory. The move follows recent capital markets transactions and a pivotal U.S. government contract win.

Analyst Jason Gursky struck a bullish tone, contending that the company is now poised for action. Gursky emphasized recent boosts in liquidity, suggesting that Rocket Lab has the wherewithal to tackle its current backlog, pursue new product development, and engage in bolt-on mergers and acquisitions.

The U.S. government contract was singled out as a particularly affirmative sign that customer adoption of Rocket Lab’s products is indeed taking off. Citi’s target price of $6, derived from a recent transaction multiple of 3.6x set against the firm’s 2026 revenue estimate, was presented as a testament to the company’s potential.

The financial firm pointed to the company’s improved liquidity, backed by Rocket Lab’s recent net proceeds of approximately $300M through a convertible and subsequent covered call transaction. The influx of funds, earmarked for a variety of strategic purposes including reducing indebtedness and fueling growth, is expected to turbocharge M&A activity and bolster the company’s competitive position.

β€œWe estimate this puts pro-forma 3Q23 liquidity at over $600M, a level that we believe is sufficient for the company to execute on its strategy and to become self-funding over time,” observed Gursky, underlining the company’s financial fortitude. He emphasized that a recent $515M award by the Space Development Agency, followed by a commercial award on a GlobalStar program, is clear affirmation of the company’s excellence. According to Citi, these developments exemplify an accelerating customer adoption for Rocket Lab’s satellite products and presage seamless execution on the backlog as they expand capacity and working capital.

Citi, reposing considerable trust in Rocket Lab, affirmed a price target of $6 for RKLB, triangulated by taking a multiple of 3.6X against the firm’s 2026 revenue estimate for RKLB. This news was well received in the market, as shares of Rocket Lab (RKLB) soared 8.87% in morning trading on Monday to $4.70, signaling an upward tick amidst the 52-week range of $3.62 to $8.05.

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