Intuitive Machines has gained significant attention recently, fueled by the company's successful landing at the Lunar South Pole on February 22, 2024.
LUNR stock surged leading up to that, with a more than 50% surge on February 20. While the stock has dipped since then, analysts at Canaccord remain bullish, with a price target that suggests a potentially significant upside from current levels.
LUNR back in the spotlight
After the recent achievement, LUNR was back in the news this week after NASA announced on Wednesday that has selected the company as the prime to lead a team of contractors developing the Lunar Terrain Vehicle (LTV), which is the modern version of the “Moon Buggy” (Lunar Roving Vehicle) from the Apollo program.
Canaccord explained that the new platform, dubbed the “Moon Racer,” will be constructed by Intuitive Machines’ consortium, which includes partners like Boeing (NYSE:BA), Michelin (EPA:MICP), Northrop Grumman (NYSE:NOC) and AVL.
Boeing and General Motors (NYSE:GM) produced the original LRV/Moon Buggy. Under NASA’s initial task order, Intuitive Machines received a $30 million contract to conduct a one-year feasibility study, with costs split among the company’s other partners/suppliers on the award. NASA also issued feasibility study contracts to Lunar Outpost and Venturi Astrolab.
“Ultimately, however, we expect a down-select around this time next year to a single vendor (as NASA indicates in its press release) for the final Lunar Terrain Vehicle Services (LTVS) contract, which is expected to be a program with a total value of $4.6B,” added Canaccord.
Analyst sees big upside for LUNR stock
Analysts at Canaccord believe LUNR’s successful landing at the Lunar South Pole, which was a first for a private company and the first US moon landing in 51 years, likely “gave the company the edge in NASA’s LTV solicitation.”
As a result, they maintained a Buy rating and $14 per share price target on the stock in a note Thursday. LUNR stock currently trades at above $6, so the price target represents a potential strong upside move if Canaccord’s bull thesis plays out.
“LTV/LTVS represents the single largest program opportunity for Intuitive Machines, which is now at least partially represented in its backlog until the final down-select is executed by NASA,” stated the firm.
The firm also believe investors should pay close attention to imminent announcements in the second quarter, during which Intuitive Machines is expected to receive a $130 million contract for the IM-4 CLPS mission (now that the FY24 budget is passed) and a potential new contract for the Near-Space Network Services (NSNS) program to “provide lunar data relay to Earth using a fleet of small satellites deployed during upcoming CLPS missions.”