Rocket Lab Shares Drop as KeyBanc Cuts Price Target Over Neutron Launch Delay
Shares of Rocket Lab Corporation (NASDAQ:RKLB) dropped Thursday morning after investment firm KeyBanc lowered its price target on the stock from $135 to $100. The target reduction follows news that the debut of the company's heavy-lift Neutron rocket has been postponed, pushing back its expected timeline for commercial space operations.
The delay stems from manufacturing flaws identified in the propellant domes of the rocket's first stage. Although Rocket Lab successfully resolved the defect, the required investigation and manufacturing adjustments delayed the project schedule. Consequently, the inaugural Neutron launch has been rescheduled from the fourth quarter of 2026 into 2027, prompting analyst Michael Leshock to remove one revenue-producing flight from 2027 financial forecasts alongside broader valuation adjustments across the growth space sector.
Despite the lower price target, KeyBanc maintained its Overweight rating on the stock. Investors will likely track Rocket Lab's execution of revised manufacturing processes leading up to the inaugural Neutron flight in 2027.
Key points
- KeyBanc reduced its price target for Rocket Lab Corporation (NASDAQ:RKLB) to $100 from $135 while retaining an Overweight rating.
- The maiden launch of the Neutron rocket was postponed from the fourth quarter of 2026 to 2027 due to propellant dome manufacturing defects.
- Rocket Lab resolved the production issue, but investigating and updating manufacturing workflows altered the project timeline.
- KeyBanc adjusted financial estimates to account for one fewer revenue-generating Neutron flight in 2027 and lower sector valuations.
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Why did Rocket Lab stock drop?
Rocket Lab stock fell after KeyBanc reduced its price target from $135 to $100 due to a timeline delay for the first flight of the Neutron rocket.
Why was the Rocket Lab Neutron rocket launch delayed?
The launch was moved from late 2026 to 2027 after manufacturing defects were found in the vehicle's first-stage propellant domes. Rocket Lab fixed the issue, but updating production processes impacted the launch schedule.
What is KeyBanc's rating on Rocket Lab stock?
KeyBanc maintained an Overweight rating on Rocket Lab stock, even after lowering its price target to $100.