New Rocket Lab Price Target After $8 Billion Iridium Update
We’re adjusting our target price for the aerospace name after some big news.
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This much we told readers on Monday: Portfolio holding Rocket Lab (RKLB) and Iridium Communications (IRDM) had announced the two firms have entered into a definitive agreement under which Rocket Lab will acquire Iridium for $54 per share in a cash and stock transaction.
That price represents an enterprise value for Iridium of approximately $8 billion. We told you that we here at the portfolio saw the deal as a positive for RKLB. The stock ran 15.9% on the day. All day on Monday and now on Tuesday morning, Wall Street is reacting to the deal. Here is a round-up of what we have seen from the sell-side so far:
On Monday, analyst Ronald Epstein of Bank of America reiterated his “buy” rating on RKLB along with his $115 target price. Epstein is rated at five stars out of five by TipRanks. Over the past two years, he has had a 65% success rate and generated an average return of 42.1%.
On Monday, analyst Jeff Van Rhee of Craig-Hallum reiterated his “buy” rating on RKLB, while also increasing his target price from $98 to $120. Van Rhee is rated at 4.5 stars out of five by TipRanks. Over the past two years, he has had a 45% success rate and generated an average return of 17%.
On Monday, analyst Andre Madrid of BTIG reiterated his “hold” rating on RKLB without setting a target price. Madrid is rated at five stars out of five by TipRanks. Over the past two years, he has had a 61% success rate and generated an average return of 52.4%.
On Tuesday morning, analyst Suji DeSilva of Roth MKM reiterated his “buy” rating on RKLB, while also increasing his target price from $100 to $130. DeSilva is rated at five stars out of five by TipRanks. Over the past two years, he has had a 64% success rate, and generated an average return of 103.7%.
On Tuesday morning, analyst Ryan Koontz of Needham reiterated his “buy” rating on RKLB, along with his $120 target price. Koontz is rated at five stars out of five by TipRanks. Over the past two years, he has had a 49% success rate and generated an average return of 61.1%.
On Tuesday morning, analyst David Siffringer of Cantor Fitzgerald reiterated his “buy” rating on RKLB, along with his $96 target price. Yes, the target is considerably lower than the last sale. Maybe that’s why Siffringer is rated at one star out of five by TipRanks. Over the past two years, he has had a 38% success rate and generated an average return of -20.2%.
Changing Our Target Price
The $10K Portfolio is cutting its target price for RKLB from a now unrealistic $185 to $131. The portfolio is satisfied with its current position size after having taken some profits along the way. The new target is based on the current positioning of the stock’s 50-day SMA and is purely technical after support had been found above the 200-day SMA and above the 78.6% Fibonacci retracement level of the late March through late May rally.
Other Portfolio News
Alto Ingredients (ALTO)
On Monday, portfolio holding Alto Ingredients (ALTO) announced the firm had been added to the Russell 2000 and Russell 3000 Indexes, effective after the market close on Friday, June 26.
Evolv Technologies (EVLV)
On Monday, analyst Michael Latimore of Northland Securities reiterated his “buy” rating on (EVLV) along with his $10 target price. Latimore is rated at four stars out of five by TipRanks. Over the past two years, he has had a 37% success rate, but still generated an average return of 19.7%.
Planet Labs (PL)
Readers likely noticed that shares of Planet Labs (PL) gained 15.6% on Monday in response to the announced acquisition of Iridium Communications by fellow portfolio holding Rocket Labs. The thought that was shared up and down Wall Street on Monday was that traders may view space-related assets as an increasingly valuable piece of strategic infrastructure.
SoFi Technologies (SOFI)
On Tuesday morning, analyst Vincent Caintic of BTIG reiterated his “hold” rating on SOFI without setting a target price. Caintic is rated at four stars out of five by TipRanks. Over the past two years, he has had a 52% success rate and generated an average return of 8.2%.
Velo3d (VELO)
On Monday, Velo3D (VELO) announced that the firm had been added as a member to the Russell 3000 and Russell Microcap Indices, effective ahead of the Monday open. The shares traded 10.6% higher, not just on this news, but also rebounding from last week’s negative story released by short seller Morpheus Research.
Monday’s Intentions vs Monday’s Actual Trades
Intention: Purchase another 25 shares of ONDS at $8.25 or better
Actual trade: Bought 25 shares of ONDS at $8.05
Intention: Purchase 5 shares of PL at $28.50 or better\
Actual trade: Nothing done
Tuesday’s Intentions
Purchase 10 shares of (SWBI) at or close to the last sale of $15.40.
Current Positions
Long 150 shares of ALTO at $5.51. Target price: $8. Last sale: $5.44.
Long 70 shares of EVLV at $5.8746. Target price: $8.50. Last sale: $5.61.
Long 200 shares of OCUL at $8.271. Target price: $11. Last sale: $10.00.
Short one OCUL $11 September 18 call at $1.65. Last sale: $1.65
Short one OCUL $9 July 17 call at $0.90. Last sale: $0.90.
Long 225 shares of ONDS at $9.1284. Target price: $14. Last sale: $8.66.
Long 30 shares of PL at $30.6067. Target price: $46. Last sale: $31.37.
Long 5 shares of RKLB at $89.162. Target price: $131. Last sale: $100.26.
Long 35 shares of (RXT) at $6.4529. Target price: $9. Last sale: $6.53.
Long 175 shares of (SIDU) at $3.0342. Target price: $6. Last sale: $2.90.
Long 135 shares of SOFI at $15.8617. Target price: $24. Last sale: $18.23.
Short one SOFI August 21 $20 call at $1.02. Last sale: $1.02.
Long 20 shares of SWBI at $16.125. Target price: $19. Last sale: $15.40.
Long 45 shares of VELO at $13.2602. No target price right now. Last sale: $19.35.
Cash: $932.43.
Portfolio Value: $11,478.14, +14.8% from inception on March 24.
At the time of publication, Guilfoyle was long ALTO, EVLV, OCUL, ONDS, PL, RKLB, RXT, SIDU, SOFI, SWBI and VELO.
