The shares of the space company Intuitive machines (NASDAQ: LUNR) defied gravity on Thursday, closing more than 24% higher, helped by an analyst’s announcement of a major price target increase. The move came just days after the company released some of its best news ever.
Overjoyed with NASA’s Moon Contract
The increase was implemented by B.RileyMike Crawford, who now believes a fair valuation for Intuitive Machines should be significantly higher, raised his share price by 50%, from $8 per share to $12, and maintained the existing buy recommendation. The new price target predicts an upside of 29% to the stock’s most recent close.
It’s not hard to be glowingly optimistic about Intuitive Machines these days. On Tuesday, the company was selected by the National Aeronautics and Space Administration (NASA) as the only company to set up a communications system between our planet and the moon.
In the grand tradition of big federal contracts, this one is potentially worth a lot of money. All told, the arrangement, which will last for five years with an option to extend to 10, could bring in as much as $4.8 billion for the agreed-upon services.
A surprising solo selection
Crawford did not expect Intuitive Machines to be the sole winner of the contract; he anticipated that one or two other bidders would be selected for the NASA project. This reinforced his impression that the ambitious company “is quickly establishing itself as a full-service space exploration company poised to deliver hundreds of millions of dollars in high-margin service revenues, enabling a long tail of robust free cash flow generation.”
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Why Intuitive Machines Shares Soared 24% on Thursday was originally published by The Motley Fool
