Space is a growth business again and despite challenges at the end of 2021 Wall Street is recommending space stocks.
Goldman Sachs analyst Noah Poponak launched coverage of earth imaging company
(ticker: PL) with a Buy rating and $11 price target. Planet stock closed at $5.64 on Tuesday, so at the time of his launch Poponak’s price target implied gains of almost 100%.
But Planet shares were on the move after his bullish call. The stock was jumping about 13% in midday trading at $6.35. The
Dow Jones Industrial Average
rose about 0.6% and 0.3%, respectively.
Poponak believes that Planet Labs is the leader in satellite-based earth observation.
The company has roughly 200 satellites orbiting the earth, taking images daily. Those images are used in a growing number of applications ranging from national defense to tracking ocean-going logistics assets. More applications are coming down the road, enabled by falling costs to reach orbit and build satellites.
It’s a bullish call on a beaten-up stock. Coming into Wednesday trading, shares were down more than 40% over the past three months. A lot of speculative stocks sold off into year-end as investors started to worry more about inflation. Inflation can lead to higher interest rates and higher rates hurt the valuation of high growth, speculative stocks more than others.
But big drops can also create opportunities and Poponak believes recent levels are a good entry point on Planet Labs stock.
He isn’t alone. This is the second new buy rating for Planet Labs in the past week. Wedbush analyst Dan Ives launched coverage of the stock on Jan. 7 with a $10 price target.
With the new rating, seven analysts now cover Planet Labs stock. All seven rate shares Buy. The average Buy-rating ratio for small-capitalization stocks is about 65%. The average analyst price target is about $13.50 a share, up about 113% from recent levels.
Wall Street, it appears, is bullish on the entire space industry. In another coverage launch Wednesday, Morgan Stanley analyst Kristine Liwag called stock in space-launch and satellite services provider
Rocket Lab USA
(RKLB) a Buy. Her price target for share is $17.
That’s another new space stock for investors to consider. With that Buy rating, 83% of analysts covering Rocket Lab stock now rate shares at Buy. The average analyst price target of $20.50 a share implies gains of about 79% from with recent levels.
If Wall Street analysts are right, 2022 could be the year space stocks go to the moon.
Write to Al Root at email@example.com
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