SpaceX's listing has caused the sector to rebound, causing potential buying opportunities? KeyBanc has raised the ratings of Rocket Lab and Firefly, and is optimistic about the long-term growth potential of commercial space travel.

SpaceX has set a record with its IPO, triggering a pullback in the commercial space sector, which in the eyes of some Wall Street institutions has become a new opportunity for positioning. KeyBanc Capital Markets analyst Michael Leshock released a report on Monday, raising the investment ratings of Rocket Lab and Firefly Aerospace from "hold" to "buy," with target prices of $135 and $50 respectively. Leshock believes that the pullback of several aerospace concept stocks after SpaceX's IPO is more due to short-term technical pressure caused by fund reallocation, rather than a deterioration of industry fundamentals. On the contrary, the long-term growth logic of the commercial aerospace industry is further strengthening. After SpaceX completed the largest IPO in the history of the US capital market with a financing scale of $75 billion last week, many commercial space concept stocks experienced varying degrees of pullback. It is widely believed in the market that some institutional investors, in order to participate in the new stock allocation of the industry "giant" SpaceX, chose to reduce their existing holdings in the aerospace sector, resulting in short-term pressure on related stocks. Leshock said: "We believe that this decline is not rational, but rather a systemic capital flow caused by funds adjusting positions to allocate to SpaceX." He pointed out that from the industry fundamentals perspective, the core DRIVE of commercial aerospace industry is not weakening but strengthening. KeyBanc believes that the global aerospace economy will continue to benefit from several long-term trends in the coming years, including rapid growth in low-Earth satellite constellation construction demand, continued tight global launch capacity, the US defense budget shifting towards space, NASA's mission expansion, and increased national security investments in orbital infrastructure. The institution even expects that even if SpaceX's Starship project fully meets expectations, the global launch market may still be in a supply and demand imbalance for over a decade. Analysts pointed out that as a large amount of Starship capacity may be absorbed by SpaceX's own business in the future, and with the gradual retirement of existing Falcon 9 rockets, other commercial launch companies will still have ample room for development. Rocket Lab has become SpaceX's strongest challenger Among all commercial aerospace companies, KeyBanc is most optimistic about the development prospects of Rocket Lab. The report stated that Rocket Lab has become the recognized "second player" in the commercial aerospace field and is expected to replicate SpaceX's early growth path in the future. Currently, Rocket Lab's Electron rocket has completed approximately 90 successful launch missions and is one of the most mature small payload rockets in the world. At the same time, the company's new generation medium lift rocket Neutron project that is in progress is also receiving high market attention. Leshock stated that earlier this year, the Neutron project caused market concerns due to testing issues, but these issues have now been resolved and the project progress is back on track. In addition to the rocket business, Rocket Lab has been continuously strengthening its vertical integration capabilities in recent years, from satellite platforms, spacecraft components to launch services, all of which are independently positioned. As of the end of the first quarter of this year, the company's order backlog has exceeded $2.2 billion. Analysts believe that in the future, Rocket Lab will also benefit from more large contracts, including the NASA Mars communication orbiter project. Furthermore, Rocket Lab will officially be included in the Nasdaq 100 index on June 22, which is also seen as a short-term significant catalyst. Firefly bets on lunar economy and defense business growth In addition to Rocket Lab, KeyBanc also upgraded the rating of Firefly Aerospace. The institution believes that as the United States restarts its moon exploration program, Firefly is becoming one of the important participants in NASA's moon strategy. Recently, after Firefly obtained a $75 million contract for the NASA MoonFall project, KeyBanc raised the company's revenue forecast. Analysts specifically mentioned Firefly's Blue Ghost lunar lander. According to KeyBanc statistics, Blue Ghost is currently the world's first and only commercial lander project that has successfully completed a soft moon landing mission. If NASA begins to increase the frequency of lunar missions as planned from 2027, Firefly is expected to continue to benefit. At the same time, the company's defense business is also worth noting. The report points out that Firefly's SciTec missile tracking software system has been deeply involved in US Department of Defense projects. According to the company's disclosed data, in the first month after the outbreak of the Iran war, the system participated in tracking approximately 1,000 missile targets. With the increasing political risks of global GEO Group Inc, the future growth potential of related defense business is also receiving market attention. Commercial aerospace is no longer just SpaceX's story KeyBanc believes that the market's understanding of the commercial aerospace industry is undergoing a change. In the past few years, investors often equate commercial aerospace with SpaceX, but as the industry chain gradually matures, more and more companies are starting to share the industry's growth dividends. Analysts pointed out that whether it is the construction of satellite Internet, the growth of defense aerospace demand, NASA's return to the moon plan, or the new round of competition around space infrastructure by various countries, it means that the future commercial aerospace market will accommodate multiple winners. Leshock stated in the report: "The scale of the future aerospace economy's development may be as profound as the changes brought by the industrial revolution." In his view, the price fluctuations brought by SpaceX's listing are more like internal fund reallocation within the industry, rather than a denial of the prospects of commercial aerospace by the market. With ongoing government investments, corporate demands, and institutional funds flowing in, commercial aerospace is gradually evolving from a growth story of a single star company to an emerging investment track with a complete industry ecosystem. For investors, the short-term fluctuations in the commercial aerospace sector after SpaceX's IPO are just an episode in this long-term expansion cycle of the aerospace industry.