Space stocks got a vote of confidence Sunday as KeyBanc Capital Markets upgraded both Rocket Lab Corp. (NASDAQ:RKLB) and Firefly Aerospace (NASDAQ:FLY) to Overweight, calling the post-SpaceX IPO selloff a buying opportunity rather than a signal of structural weakness.

RKLB stock is moving. See the chart and price action here.

Analyst Michael Leshock established a $135 price target on RKLB, implying 26% upside from current levels, while FLY’s $50 target carries 48.5% upside.

The note argues the SpaceX (NASDAQ:SPCX) IPO-related pressure on space equities was “largely systematic in nature” as funds made room for the newly public megacap, and not a reflection of deteriorating fundamentals.

KeyBanc sees the same structural tailwinds intact: exponential satellite constellation growth, a chronically undersupplied launch market and a proposed U.S. defense budget of $1.07 trillion that earmarks $56 billion for space-based systems, nearly double this year's levels.

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