ASTS, RKLB Stocks Sink To Multi-Month Lows While SPCX Holds Steady – Piper Sandler Says Elon Musk’s Company Is Yet To Prove Itself

• Piper Sandler initiated coverage of AST SpaceMobile with an 'Overweight' rating and a $100 price target.
• Rocket Lab shares fell more than 10% to a three-month low after having slipped below their 200-day simple moving average on Wednesday.
• Investors are also watching SpaceX's Starship test flight after the market close, with JPMorgan saying the outcome could influence sentiment toward the company.

Shares of AST SpaceMobile (ASTS) and Rocket Lab USA (RKLB) plummeted by midday trade on Thursday ahead of SpaceX's (SPCX) latest Starship test flight, even after Piper Sandler initiated coverage of all three companies and named AST SpaceMobile its preferred stock in the sector.

AST SpaceMobile's decline also followed the pricing of a $1 billion private offering of 1.625% convertible senior notes due 2034. The notes carry an initial conversion price of $79.57 per share, and the company expects to receive approximately $983.6 million in net proceeds. 

ASTS’ stock fell by over 15% in midday trade, dropping to lows last seen in December. Meanwhile, RKLB’s stock dropped over 10% to a three-month low. Both shares were among the top trending tickers on Stockwits at the time of writing. 

Retail sentiment around both companies improved to ‘neutral’ from ‘bearish’ over the past day. Chatter around ASTS rose to ‘high’ from ‘low’ levels, while chatter around RKLB stayed at ‘normal’ levels. 

ASTS Stock Falls Despite Piper's Bullish Rating

Piper Sandler initiated coverage of AST SpaceMobile with an 'Overweight' rating and a $100 price target, implying roughly 75% upside from current prices of around $57, after the dip.

The firm said it prefers AST SpaceMobile because of its "more palatable valuation" and a clearer path toward earnings expansion than other names in the sector.

Analyst Alexander Potter noted AST's direct-to-smartphone satellite network would likely drive the stock price higher, pointing out that the company has secured partnerships and equity investments from several of the world's largest mobile network operators.

Piper Sandler Says Rocket Lab Offers Growth, But Valuation’s Higher Than SPCX

Piper Sandler also initiated coverage of Rocket Lab with a 'Neutral' rating and an $83 price target, representing about 22% upside from current levels near $68.

The firm said Rocket Lab's Electron launch vehicle continues to dominate the small-payload market, while the reusable Neutron rocket represents the company's next major growth catalyst.

However, Piper Sandler added that Rocket Lab already trades at a premium to SpaceX and expects that valuation relationship to remain largely intact over the coming year.

SpaceX Dominates The Industry, But Near-Term Risks Remain

Piper Sandler initiated coverage of SpaceX with a 'Neutral' rating and a $156 price target, implying roughly 9% upside from current levels around $143.

The "emerging market for space-based services owes its existence to SpaceX," the firm told investors in a research note. However, it said that "idiosyncratic near-term headwinds" will likely cap upside in SpaceX shares. Piper Sandler cited staged lockup expirations and uncertainty regarding a potential Tesla acquisition as examples. 

It added that it will take time for the market to be convinced that SpaceX can deliver on its "truly game-changing approach" to launching orbital AI data centers.

SPCX’s stock traded flat in midday trade. On Stocktwits, retail sentiment around the Elon Musk-led company trended in ‘bearish’ territory over the past day. 

Looking forward, JPMorgan said SpaceX shares could react to the outcome of the company's latest Starship test flight. The bank maintained an 'Overweight' rating and a $225 price target, stating that the company’s Starship remains central to SpaceX's long-term strategy despite individual test flights representing only incremental milestones.

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