A new analyst is out with coverage on SpaceX. Why KeyBanc thinks the stock could be cut in half

SpaceX received a cautious appraisal from KeyBanc Capital Markets, which said the stock's lofty valuation already reflects much of its long-term growth potential. The investment bank began coverage of the Elon Musk-led, aerospace and satellite company with a Sector Weight rating, equivalent to more than a hold recommendation on Wall Street. It stopped short of issuing a price target for the stock. "SPCX possesses significant disruptive growth avenues, though we believe this is reflected in current valuation and risk/reward appears balanced, in our view," KeyBanc wrote to clients. Shares of SpaceX are up about 27% from their IPO price of $135, but the stock has fallen more than 20% from its peak, leaving it with a market capitalization of roughly $2.2 trillion, including debt. KeyBanc's own valuation framework paints a far more cautious picture. SPCX 1M mountain SpaceX since going public In a base-case scenario, the bank estimated SpaceX's enterprise value at about $1.02 trillion, using discounted future cash flows from Starlink and other connectivity businesses. That's less than half the SpaceX current enterprise value, suggesting investors are pricing in a far rosier future. At the center of KeyBanc's hesitation is Starship, the giant reusable rocket that Musk, the CEO, has described as critical to the future of satellite deployment, deep-space exploration and, eventually, colonization of Mars. …