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Investing.com - RBC Capital reiterated an Outperform rating and Cdn$50.00 price target on MDA Space Ltd (TSX:MDA) (NYSE:MDA) following NASA’s announcement to pause the Gateway program during its Ignition event today.The stock, currently trading at $29.87, has delivered strong returns with a 68% gain year-to-date, though InvestingPro data suggests shares may be overvalued at current levels based on its Fair Value analysis.
NASA stated it will shift focus to infrastructure enabling sustained surface operations after a comprehensive review of the Artemis mission. The agency plans to re-purpose applicable equipment and leverage international partner commitments to support its objectives.
RBC Capital noted the Canadian Space Agency, not NASA, funds the Canadarm3 program as the contracting agency. MDA Space stated there has been no change to any contract with Canadarm3 work continuing to progress forward.
The firm estimates the Canadarm3 program will account for approximately $300 million in 2026 and 2027 revenues. RBC Capital believes MDA has likely realized more than 50% of the costs on the current Canadarm3 contract valued at approximately $1 billion.For deeper insights into MDA’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available for this and 1,400+ other US equities on InvestingPro.
RBC Capital expects the Canadian Space Agency will continue supporting the design phase of Canadarm3, even if the program scope is adjusted. MDA remains in dialogue with the CSA and expects Canada will continue contributing robotics technology to Artemis by adjusting the scope of Canadarm3.
In other recent news, MDA Space Ltd. announced the successful completion of its initial public offering in the United States, raising approximately $300 million. The company listed its common shares on the New York Stock Exchange, marking a significant milestone. Additionally, MDA Space raised an extra $41 million through an over-allotment option, bringing the total gross proceeds from its public offering to around $341 million. The offering was managed by J.P. Morgan and RBC Capital Markets, among others.
Furthermore, MDA Space secured a $32 million contract from Canada’s Defence Investment Agency to deliver space surveillance systems. This contract involves establishing three Ground-Based Optical observatories across Canada by 2028. In a separate development, the company confirmed that its Canadarm3 contract remains unaffected by NASA’s recent strategic changes. The contract is with the Canadian Space Agency, ensuring continued progress without modifications.
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