Rocket Lab’s stock has doubled this year — and Deutsche Bank sees it climbing even higher

Rocket Lab’s stock has been on a tear, more than doubling this year. Deutsche Bank sees even more gains ahead for the the space company. “Launching rockets is clearly a tough business and Rocket Lab (RKLB) continues to demonstrate its operational leadership as the field thins out,” Deutsche analyst Edison Yu wrote in a note to clients Wednesday. Deutsche has a buy rating on Rocket Lab and a $10 price target that is nearly 28% above Tuesday’s close of $7.83 a share. Rocket Lab’s stock is up 107% year to date. “Despite a shaky start to 2023 for Space companies,” Yu thinks that several companies’ stocks are bouncing back, “helped in party my a more accommodative macro regime that doesn’t indiscriminately penalize growth stocks” such as those in the space sector. Deutsche expects Rocket Lab’s revenue and profitability to continue to climb, thanks to more launches by its Electron rocket. The bank also sees upside from a ramp-up in production of spacecraft products for the satellites Apple ordered to build out its backup connectivity network . “An important element of our bull thesis on Rocket Lab is that launch capability is scarce and adding capacity is much more difficult than perceived,” Yu wrote, noting delays to other SpaceX competitors such as United Launch Alliance and Arianespace. Additionally, Yu highlighted Rocket Lab’s recent purchase of former Virgin Orbit assets — bought at an 80% discount in an auction. While Yu thinks the assets will have “material savings in the future” for Rocket Lab’s coming Neutron vehicle, the analyst does not expect to see the purchase reduce the company’s capital expenditures this year. – CNBC’s Michael Bloom contributed to this report.