This analyst just raised his price target on MDA Space

Russell Stanley of Beacon Securities raised his price target on MDA Space (MDA Space Stock Quote, Chart, News, Analysts, Financials TSX:MDA) to $73.00 from $66.00 while maintaining a “Buy” rating following the company’s US$300-million initial public offering on the New York Stock Exchange.

In a  March 16 report following the offering, Stanley said the U.S. listing should improve investor awareness and trading liquidity while strengthening the company’s balance sheet to support growth initiatives.

“In addition to providing additional balance sheet power to fund growth, the U.S. listing should drive improved investor awareness and trading liquidity, supporting an overdue rerating of the stock,” Stanley said.

MDA priced the offering at US$30.50 per share, with proceeds earmarked for growth initiatives including expanding its customer base and technology portfolio as well as pursuing strategic opportunities such as mergers and acquisitions. Beacon assumes a portion of the proceeds will also be used to reduce the company’s $700-million revolving credit facility.

Stanley said the listing should allow MDA to be compared more directly with U.S.-listed space companies such as Intuitive Machines and Redwire, which he considers the company’s closest peers.

MDA currently trades at about 15 times Beacon’s 2027 adjusted EBITDA forecast, representing a 56%-to-73% discount to the 33-to-54 times multiples at which those companies trade. Stanley noted that MDA is already profitable on an earnings basis, while the peers are only expected to reach positive EBITDA this year.

Beacon increased its valuation multiple for MDA to 25 times forecast 2027 Adjusted EBITDA, up from 22 times previously, which more than offsets the dilution from the equity financing that increased the share count by just under eight per cent.

Stanley said the valuation still represents a 25%-to-54% discount to comparable companies and suggests further upside if trading liquidity improves.

Separately, Stanley noted a recent development involving Maritime Launch Services, in which MDA is an investor. The company announced a 10-year, $200-million agreement with Canada’s Department of National Defence to lease a dedicated launch pad at Spaceport Nova Scotia. MDA invested $10-million in Maritime Launch Services last November.

Beacon forecasts MDA will generate $1.78-billion in revenue and $334-million in Adjusted EBITDA in fiscal 2026, improving to $2.02-billion in revenue and $409-million in Adjusted EBITDA in fiscal 2027.

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