- Wells Fargo analyst Matthew Akers initiated coverage of Maxar Technologies Inc (NYSE:MAXR) with an Overweight rating and a $39 price target (55% upside).
- MAXR is the established leader in satellite earth imaging, with potential upside in space infrastructure if the LEO small satellite boom plays out as planned, Akers stated.
- While MAXR is a firmly entrenched "old space" company, its space infrastructure business provides exposure to potential "new space" upside, he believed. If new space is this profitable, it could drive a significant upside to MAXR's margins.
- Akers believes Maxar's recent EOCL contract win de-risks its earth observation outlook. At the same time, its upcoming Legion satellite launches provide a catalyst and further expand its lead in high-resolution imaging.
- Maxar's multiple could expand, and cash flow could benefit as it de-leverages, Akers noted.
- He thinks MAXR stands out compared to the other space companies thanks to its steady sales and profits.
- Among the companies WFC tracked, MAXR posted the highest revenue run rate and margins, which he believed will continue in the future.
- MAXR's upcoming launch of Legion satellites on three separate SpaceX Falcon 9 could serve as catalysts for the stock, as per Akers.
- He thinks MAXR's multiple can expand as it continues to pay down its debt balance, and its cash flow should improve as it de-levers.
- Price Action: MAXR shares traded higher by 4.49% at $26.31 on the last check Tuesday.
