Piper cautious on SpaceX, points to near-term headwinds

Investing.com -- Piper Sandler initiated coverage of SpaceX at Neutral with a price target of $156 in a note Thursday, citing idiosyncratic near-term headwinds despite a constructive multi-year view on the company.

Analyst Alexander Potter launched coverage of the space sector alongside ratings on AST SpaceMobile (Overweight) and Rocket Lab (Neutral).

Piper Sandler is "comfortable underwriting the multi-year thesis" for SpaceX after covering Tesla for more than a decade, but is initiating at Neutral "because there are some idiosyncratic near-term headwinds that we think will likely cap upside," specifically staged lockup expirations and uncertainty regarding a potential Tesla acquisition.

The firm added that it will take time before the market is convinced SpaceX can deliver on its approach to launching orbital AI datacenters, while capital expenditure will "easily consume 10s (if not 100s) of billions of USD annually" in the meantime. The $156 price target is based on 20x 2031 EV/EBITDA, discounted at 15%.

Piper Sandler said the Neutral-rated rocket builders, SpaceX and Rocket Lab, are "probably best-positioned over a multi-year period" given the difficulty of building reusable rockets and the cost advantages of vertical integration.

However, the firm said it's "hard to argue that SPCX and RKLB are 'cheap'" over a one-year horizon, and instead prefers AST SpaceMobile due to a more palatable valuation and clearer path to EBITDA upside.

Piper Sandler set a $100 price target on AST SpaceMobile and an $83 target on Rocket Lab.

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