New Rocket Lab Price Target With Earnings on Deck
The aerospace stock has offered up some new updates as the firm prepares to report its financials.
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I have not updated Rocket Lab (RKLB) since the very start of the month, which is a long time for me.
Rocket Lab, of course, is a core "Stocks Under $10" name and still a core (top-five) holding of the famous or infamous (depending on one's opinion) Sarge-folio. Rocket Lab is set to report a week from Thursday (on February 26, after the close).
For the firm's fourth quarter, Wall Street is looking for an adjusted EPS of -$0.05 on revenue of $178.2 million. That would be a slight improvement from the year-ago comp of -$0.06 on annual revenue growth of about 34.6%. Rocket Lab has beaten or at least met earnings expectations for 12 consecutive quarters and beaten revenue projections for five straight quarters.
Technical Update
I last touched on RKLB's technicals for the public on February 2. I had warned of a developing head-and-shoulders pattern of bearish reversal as early as mid- to late January and refined that picture at that time. This is the chart from the original warning on January 22:
This is what actually transpired:
Readers can see that the head-and-shoulders call was accurate. The stock bottomed at $63.87 last week. Funny thing happened at that level, which was the downside pivot. Support showed up at pivot and said pivot was never triggered.
Now, going into earnings, the stock is trying to retake its 50-day SMA, relative strength has improved to the point of reaching a neutral reading, and the stock's daily MACD is looking better too. The stock is already up 17.4% from last week's nadir as the 12-day EMA appears ready to take a shot at crossing above the 26-day EMA. Yes, that would be bullish.
I admitted at the time of that last piece that my $110 target price had become a little unrealistic, at least at that time, but that I had nothing new to go off of. Now I do. That 50-day line is our new pivot. That means that I have to reduce the target price for the medium-term, but I am no less bullish on the stock longer-term.
Rocket Lab (Ahead of Earnings)
Target Price: $94 (down from $110)
Pivot: $75 (50-day SMA)
Add: Down to $68 (for now)
Panic: Loss of 200-day SMA ($51)
At the time of publication, Guilfoyle was long RKLB equity.
