Redwire Downgraded to Hold as Shares Fall 16% on Valuation Concerns
RDW•Jefferies downgraded Redwire to Hold from Buy, citing valuation at 9x estimated 2026 sales versus 3x last year and limited near-term upside despite a rally that doubled its stock in May. Redwire shares fell nearly 16%, on track for their largest single-day drop in six months.
1. Jefferies Downgrades Redwire
Jefferies shifted its rating on Redwire from Buy to Hold and raised its price target to $24 from $13, signaling no further upside in the near term. The firm highlighted that recent gains have outpaced fundamentals and that backlog conversion milestones must be achieved before upgrading the outlook.
2. Valuation Concerns
Redwire’s current valuation stands at roughly 9 times its projected 2026 sales, up from more than 3 times last year. Jefferies warned this multiple leaves limited room for additional upside absent clear execution on contract backlogs.
3. Stock Plunge
Shares of Redwire dropped nearly 16% on the downgrade, marking the largest single-day percentage decline in six months. The sell-off erased much of the gains from recent months and reflected investor caution on stretched valuations.
4. Rally Background
The stock more than doubled in value during May as investor enthusiasm around space infrastructure stocks surged. Optimism linked to an anticipated SpaceX IPO fueled broader sector gains, which Redwire’s rally had mirrored.
