Space stock Maxar rallies on third quarter results as Wall Street welcomes advances on major satellites

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Maxar Technologies stock rose Thursday following the release of third-quarter results, with Wall Street analysts hailing the space company’s progress in launching key satellites next year.

The company reported adjusted EBITDA earnings of $ 113 million for the third quarter, which was higher than what analysts surveyed had expected $ 109.9 million, while Maxar’s revenue was below forecast – at 437 Million US dollars versus 447.7 million US dollars expected.

Wall Street’s focus, however, is on Maxar’s advances in its WorldView Legion satellites.

Legion is the company’s constellation of six image satellites and is critical to ensuring that the company continues to receive lucrative contracts from US defense and intelligence agencies. Maxar announced a delay in the launch of the first two Legion satellites in August, which the company is targeting between March and June 2022 – a schedule the company reiterated in its latest report.

Baird has upgraded Maxar’s rating from neutral to outperformance, with a price target of $ 39, up 44% from the stock’s most recent closing price.

“The outlook has been greatly diminished given the visibility of Legion’s initial launch, and current prices provide a safer entry point,” Baird analyst Peter Arment wrote in a statement to customers.

Maxar’s shares rose nearly 18% in trading from their previous closing price of $ 27.05.

Baird said his previous neutral assessment was “largely out of caution about possible” further Legion delays, but “line of sight to initial launches is now much clearer”.

JPMorgan analyst Seth Seifman, who has an overweight rating and a target price of $ 47, similarly pointed out that the Legion launch is “the most important event” for Maxar.

“We see a clear path to operational improvement with strong cash flow generation in 2023, mainly driven by the launch of Maxars WorldView Legion,” Seifman wrote to clients.