Investing.com -- Morgan Stanley said SpaceX's Starship Flight 13 marked a significant step forward in the rocket's development, arguing the latest test should increase investor confidence despite an imperfect booster landing.

The brokerage assigned the mission an overall grade of "A-", citing successful execution of key milestones including the first deployment of production-version Starlink V3 satellites, a successful in-space Raptor engine relight, and the spacecraft's softest splashdown to date.

Morgan Stanley said the flight's biggest positive came after the mission, when Chief Executive Elon Musk indicated SpaceX could attempt the first-ever catch of the Starship upper stage with the launch tower during Flight 14, providing investors with a tangible near-term catalyst. The firm maintained its Overweight rating and $300 price target on SpaceX.

The brokerage acknowledged that the Super Heavy V3 booster's hard splashdown would likely draw criticism, as only around five of 13 engines ignited during the final landing burn. However, it argued the outcome still represented progress compared with Flight 12, when the V3 booster failed before reaching its landing attempt.

Morgan Stanley highlighted several mission achievements, including flawless liftoff and ascent with all 33 Raptor engines firing, clean hot-stage separation, the first deployment of 20 production Starlink V3 satellites, a successful Raptor engine restart in space, and an intact splashdown that enabled SpaceX to collect extensive heat shield data.

Looking ahead, the firm expects Flight 14, potentially as early as late August or early September, to attempt the first tower catch of the Starship upper stage, implying the program's first orbital flight. It added that Flight 15 could become the first mission to attempt catching both the ship and the V3 booster if the next test is successful.

Morgan Stanley noted that the first post-earnings lock-up expiration following the August 4 results remains an overhang for the stock, but concluded the overall implications of Flight 13 were positive, with the next major milestone now shifting to a successful ship catch.