Rocket Lab Soars 6% as Morgan Stanley Looks Past “Q3 Margin Noise” to Neutron

Morgan Stanley reduced its price target for Rocket Lab to $103, 56% above its Nov. 11 close of $66.15, while maintaining an Overweight rating. The company sold $2.4B in stock Q3 and delayed Neutron's first launch to 2027. Analysts expect 3 cents EPS for 2027, down from 16 cents a year ago. Rocket Lab reported record revenue of $268M, up 73%, but a wider GAAP loss of 12 cents per share.

Rocket Lab's $8B acquisition of Iridium Communications faces FCC review opposition from SpaceX, which claims Iridium's spectrum objections are anticompetitive. The deal, valued at $54 per share, is expected to close in 2027. SpaceX seeks to include Iridium's spectrum behavior in the FCC's public-interest assessment, while Rocket Lab and Iridium argue the merger is pro-competitive. The FCC must decide whether to consider spectrum disputes in merger reviews.

Rocket Lab CEO Peter Beck sees a $1 trillion market in space services, beyond the $10-20 billion launch market. The company's proposed $8 billion acquisition of Iridium Communications (IRDM) is expected to close in mid-2027. Neutron rocket's debut is delayed to 2027, with 16 flights booked, including 8 worth $515 million. RKLB stock is down 5% year-to-date, with mixed retail sentiment.

Rocket Lab USA secured a conditional $150M loan from the Department of War's Office of Strategic Capital for its reusable Neutron rocket. Funds will expand production and add recovery vessels. The loan is subject to due diligence and other conditions. Neutron is designed to carry 13,000 kg to low Earth orbit, supporting satellite constellations and national security payloads. This is OSC's third $150M space-sector commitment.

Rocket Lab reported Q3 2026 revenue of $267.8M, up 73% YoY, exceeding forecasts. Net loss widened to $79.7M, with adjusted EBITDA at -$18.0M. Space systems revenue grew 88% to $214.8M. Neutron rocket's launch delayed to 2027 due to manufacturing issues. Backlog reached $3.57B, with $1B in new launch contracts. Iridium acquisition pending regulatory approval, expected to close in 2027.

Rocket Lab USA (RKLB) reported a Q3 EPS loss of $0.12, missing estimates, but revenue rose 73% YoY to $268M, beating forecasts. The company's backlog reached $3.57B, up 52% QoQ. Analysts maintain a Strong Buy rating with an average price target of $95.35, suggesting 52% upside. RKLB shares are down 10% YTD.