The Hidden Supply Chain Behind Every SpaceX Launch - Energy | PriceONN
Ahead of the SpaceX IPO, Rothschild & Co Redburn analyst Tony Jones published a note on space propellant economics and identified an industrial-gases giant that is well positioned to dominate the market for rocket propellants and mission-critical launch gases as SpaceX's Starship launch cadence gains momentum and the broader space economy is set to double by 2035. Jones and his team reiterated their "Buy" rating on Linde and raised their 12-month price target to $560 from $550, telling clients...

The Hidden Engine of Space Exploration

As the private space sector gears up for unprecedented expansion, a quiet giant in the industrial gases market is set to become an indispensable partner. Ahead of potential public offerings from major players like SpaceX, a detailed analysis points to Linde as a key beneficiary of the accelerating pace of space launches. This industrial gas powerhouse, with a history spanning six decades of fueling America's space endeavors, appears uniquely positioned to capitalize on the growing demand for mission-critical propellants and gases.

The broader space economy is on the cusp of a dramatic transformation, with projections indicating a doubling in value by 2035. At the heart of this expansion lies the rapidly increasing launch cadence of next-generation vehicles, most notably SpaceX's Starship. This colossal rocket, designed for deep space missions and large-scale orbital deployments, represents a significant leap in propellant requirements compared to its predecessors.

Starship: A Catalyst for Unprecedented Demand

Recent equity research from Rothschild & Co Redburn delves into the economics of space propellants, identifying Linde's deep entrenchment in the sector as a formidable competitive advantage. Analyst Tony Jones and his team are particularly optimistic about the impact of Starship. They view the transition to this heavy-lift vehicle as a major demand accelerator, estimating that a single Starship launch could consume approximately ten times the amount of oxygen required for a Falcon 9 mission.

This surge in propellant needs translates directly into substantial revenue opportunities for Linde. The research suggests that Linde's revenue per average space launch could climb from just under $4 million in 2025 to nearly $6 million by 2028. This growth trajectory is further amplified by the prospect of a dramatically increased launch frequency.

Projected Growth and Financial Upsides

The analysis highlights several key growth levers for Linde. The company's capital expenditures dedicated to the space sector are being ramped up in tandem with SpaceX's operations at Starbase. While these space-related capital outlays fall outside Linde's traditional gas backlog and do not currently carry take-or-pay clauses, the expectation is that new contracts will materialize, providing a clear catalyst for upward revisions to the company's valuation.

The potential for accelerated earnings per share (EPS) growth is significant. Linde is described as a fundamentally strong business, managed by top-tier leadership. Building on this assessment, the researchers reiterated their conviction with a "Buy" rating and increased their 12-to $560 per share, up from $550.

Market Connections and Future Outlook

The note from Rothschild & Co Redburn pinpoints the critical role of industrial gases, such as liquid oxygen, nitrogen, and helium, alongside cryogenic services and rare gases, in supporting the expanding space economy. While current space sales constitute a modest ~2% of Linde's total group revenue, the potential for rapid scaling as the Starlink ecosystem matures and other space ventures gain traction is immense.

Looking ahead, SpaceX's ambitious targets, including over 1,000 Earth orbit flights per year by 2028 for Starship, paint a picture of exponential growth. This vision, while aimed at building a self-sustaining Mars city, underscores the colossal demand for launch infrastructure and the essential gases that power it. The focus on Starship as the dominant propellant gas user this year signifies a potential shift, though 2026 is still projected to be dominated by Falcon 9 flights, with Starship primarily undergoing crucial test flights to reach optimal range.

Reading Between the Lines

The narrative surrounding SpaceX's ascent often focuses on its reusable rockets and ambitious timelines. However, this analysis directs attention to a less visible, yet equally critical, component of its success: the industrial gas supply chain. Linde's long-standing relationship with space agencies and its current strategic positioning suggest a durable competitive advantage. The potential for substantial revenue growth, driven by the sheer scale and frequency of Starship operations, presents a compelling investment thesis.

Traders and investors should monitor Linde's commentary on its space segment growth and any updates regarding new contract wins. The increasing capital expenditure allocated to this sector, even without immediate take-or-pay guarantees, signals management's confidence in future demand. The proximity of Linde's price target to its current trading level also suggests that the market may be beginning to price in some of this future growth, making any acceleration in contract announcements or launch successes a key potential catalyst.

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#Linde #SpaceX #Starship #Aerospace #IndustrialGases #PriceONN

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