MDA Space (MDA.TO) is positive on its prospects in both commercial and defense markets, RBC Capital Markets analyst Ken Herbert, who has an outperform rating and $58.00 price target on the shares of the company, wrote.
The company's chief financial officer Guillaume Lavoie, who presented at the RBC Canadian Industrials Conference, highlighted a global space economy that is projected to reach up to $1.8 trillion by 2035, including 40,000 to 50,000 new satellites expected to launch within the decade. MDA estimates its addressable share at 20% to 30% of the space market.
The expected growth in Canadian defense spending, from $63 billion today to potentially $155 billion in 2035, also provides opportunities for MDA in terms of satellite systems and other products, captured under its newly created 49North business.
MDA has $300 million in net cash, and sees strategic M&A as an option. It remains focused on either key technologies, or assets that would help with greater sales exposure into the U.S. market, Herbert writes. MDA sees its space technology; space-grade ASIC chips, digitally formed and electronically steered beams, and its manufacturing capabilities, as key reasons supporting its "right to win".
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