Rocket Lab and Firefly Aerospace rallied after KeyBanc upgraded both stocks and said the recent space-sector selloff tied to SpaceX’s IPO was unwarranted. The firm sees room for multiple launch providers and highlighted Rocket Lab’s Neutron and Firefly’s Eclipse programs.

Rocket Lab shares rebounded Monday after KeyBanc Capital Markets upgraded the company and Firefly Aerospace, arguing that the recent selloff in space stocks tied to SpaceX’s historic IPO was overdone.

The move came after several space-related names fell when SpaceX’s market debut drew investor attention and sparked concern that the public listing could intensify competition for launch demand. KeyBanc analyst Michael Leshock said that view was misguided, according to reporting from MarketWatch and Barron’s.

Rocket Lab rose 6.7% on Monday. Firefly also recovered as investors reacted to the upgrade.

Why KeyBanc turned more positive

KeyBanc upgraded both Rocket Lab and Firefly to overweight, saying the SpaceX-fueled selloff was unwarranted. Barron’s reported price targets of $135 for Rocket Lab and $50 for Firefly.

The analyst’s case is that demand for launch services remains broad enough to support more than one provider, even after SpaceX’s public debut. In that view, the IPO is not a reason to assume Rocket Lab or Firefly lose relevance in the market.

What investors are watching

The analyst note pointed to Rocket Lab’s Neutron and Firefly’s Eclipse as key longer-term programs. Both are medium-lift rockets that could help the companies compete for future launch business if development stays on track.

The rebound also matters because it shows how quickly sentiment in the space trade can shift. SpaceX’s IPO and first-day trading surge helped trigger the earlier selloff in other space names, but Monday’s move suggested some investors were willing to reenter the group after the upgrade.

SpaceX later said its IPO had raised $85.7 billion after a greenshoe exercise, underscoring the scale of the listing that helped drive the broader sector reaction.

For now, the question is whether Rocket Lab and Firefly can hold onto Monday’s gains or whether traders will fade the move as they reassess the implications of SpaceX entering the public market.

Revision note

Initial automated publication.