Is there room for SpaceX (SPCX.US) to rise 80% hidden in Starships? Damo: The 15th test flight will be a major catalyst

The Zhitong Finance App learned that Morgan Stanley said that SpaceX (SPCX.US)'s upcoming 15th Starship mission may mark an important step towards fully reusable next generation rockets, which is expected to expand the company's opportunities in the field of satellite communications and artificial intelligence (AI).

In a research report released last Sunday, chief analyst Adam Jonas reiterated SpaceX's “overstock” rating and a target price of $300, which means there is room for an increase of about 84% from the stock's closing price of $163.42 on Monday. Jonas said that the next two Starship missions may reshape investors' expectations about the company's growth prospects.

According to information, the 15th test flight is tentatively scheduled to take place on November 8, local time, and may include an attempt to capture the returning Starship spacecraft using the launch tower's robotic arm. SpaceX CEO Elon Musk recently said that the company wants to try this operation, but it has yet to be confirmed. According to preliminary air traffic control notices quoted by Morgan Stanley, the 16th test flight may be carried out as early as December 10. Both dates have not been confirmed by SpaceX.

For investors, the significance is not limited to recycling spaceships as a technological achievement. If reusable technology is implemented, launch costs will be drastically reduced, and at the same time, the payload scale of SpaceX's single launch into orbit will also increase significantly, thereby improving the profit model of its Starlink satellite network and supporting the company to expand emerging tracks such as orbital computing power and space manufacturing.

Morgan Stanley estimates that the bandwidth that can be deployed for a single Starship mission carrying a new-generation Starlink satellite is equivalent to the total number of launches of the Falcon 9 rocket over 1 to 2 months. According to the report, the downstream bandwidth capacity of each Starlink V3 satellite is about 10 times that of the V2 Mini satellite launched by the Falcon 9 rocket.

After deploying 26 Starlink V3 satellites in the 14th test flight, Jonas expects the next mission to carry a similar or even larger payload. Starships can carry up to 60 such satellites, providing an opportunity to accelerate deployment while reducing the number of launches required to expand the Starlink network.

The analyst warned that technical challenges remain serious, particularly repeated engine failures during recent Starship test flights. The three launches involving the V3 configuration all had booster engine problems before they were splashed, and two of them also experienced spacecraft vacuum engine failure. Although the number of booster engines that successfully ignited during the landing attempt has improved, if further setbacks occur, the hardware reuse process will be delayed and the pace of launch in 2027 will be limited.

Morgan Stanley does not expect SpaceX to try to capture the booster during the 15th test flight, citing engine failure during the previous mission. However, the agency successfully recovered both the spacecraft and booster during a single test flight, and then re-used the V3 hardware, which was listed as an important milestone in achieving the commercial goals of the plan.

The bank's target price of $300 reflects the segmented valuation method, which includes $118 per share for the connected business, $165 per share for enterprise AI, $8 per share for the external launch business, and an additional $8 per share for the X platform and consumer AI business. This valuation highlights Morgan Stanley's view that Starship's biggest financial contribution may come from driving growth in other businesses rather than generating revenue from commercial launches alone.

Jonas estimates that at a price of around $160 per share, investors value SpaceX's launch and connectivity business at around $127 per share, and only around $33 is due to AI. This implied AI valuation is about 3 times the expected corporate value/sales of a cloud infrastructure business in 2028, indicating that if the company successfully implements its computing power strategy, there will be room for a sharp rise in stock prices.

Morgan Stanley pointed out that further progress in Starship's R&D, the launch of new AI products, and additional cloud infrastructure contracts priced at around $30 to $50 per watt are potential catalysts that could push the stock towards a target price of $300. The bank also believes that expanding satellite connections and deploying computing power infrastructure in orbit also present opportunities.

The report points out that if the stock price falls to around $100 in the next 12 months, it is likely that several conditions will need to be met at the same time: a significant slowdown in AI research and development, a major failure in Starship tests, and large-scale equity dilution. Other risks include the growth rate of Starlink users falling short of expectations, rising infrastructure capital expenditure, delays in regulatory approval, and weakening the ability of enterprises to monetize AI services than expected.

Morgan Stanley predicts SpaceX earnings per share of $0.55 in 2026, increase to $2.54 in 2027, and increase to $6.01 in 2028. These estimates mean a significant acceleration in earnings, although the company's valuation is still dependent on ambitious growth assumptions and successful execution of multiple businesses.

The bank's core thesis is that progress in the full reusability of Starships may be an important driver of this growth, and the 15th test flight will initially test whether these expectations can be realized.