Why Rocket Lab Stock Is Losing Altitude Today
Key Points
Piper Sandler initiated coverage on Rocket Lab stock with a neutral rating this morning.
The firm sees AST SpaceMobile as a better space stock investment opportunity right now.
Rocket Lab (NASDAQ: RKLB) may excel at soaring into the final frontier, but gravity is weighing pretty heavily on shares today. An analyst initiated coverage on the launch services stock with an unenthusiastic outlook, and investors are choosing to click the sell button as a result.
As of 2:14 p.m. ET, shares of Rocket Lab are down 12.1%.
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One analyst thinks shares are pricey
Assigning a neutral rating, Piper Sandler analyst Alexander Potter initiated coverage on Rocket Lab stock this morning and set an $83 price target. Based on shares of Rocket Lab closing at $76.20 yesterday, Potter's price target implies upside of 8.9%.
According to Thefly.com, Piper Sandler sees Rocket Lab trading at a premium to SpaceX and expects its stock to trade at a similar valuation over the next year. Furthermore, with respect to space stocks, the firm has taken a more bullish view on AST SpaceMobile, initiating coverage after the market closed yesterday with a $100 price target -- representing upside of about 51% from yesterday's closing price of $66.31.
Are investors better off choosing not to lift off with a Rocket Lab investment now?
While today's drop in Rocket Lab stock may be disappointing, current investors shouldn't feel compelled to exit their positions based on Piper Sandler's lackluster outlook. It's important to remember that this is merely one firm's opinion, and others see things differently, believing Rocket Lab stock will rise considerably higher through 2026 and beyond.
Of course, analysts' perspectives are one thing, but the most important thing for investors to bear in mind is that it's encumbent on them to exercise their due diligence to see if a Rocket Lab investment is right for them.
Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AST SpaceMobile and Rocket Lab. The Motley Fool has a disclosure policy.