Stifel downgrades Intuitive Machines due to political uncertainty

The fact that the new head of NASA is the billionaire founder of an e-commerce payments company with no prior experience working in government and no background in the aerospace industry would've been surprising in the years before the Trump era.

But Jared Isaacman, who was confirmed by the Senate as NASA's 15th administrator last month, fits the mold of other high ranking members of the Trump administration who bring little-to-no qualifications that align with the role they are now serving.

But this lack of a track record in the industry - and the fact that he's been in the job for less than a month - creates a lot of uncertainty about where Isaacman plans to lead the space program in the coming years.

And this uncertainty facing NASA was enough for analysts from Stifel, led by Jonathan Siegmann, to downgrade Intuitive Machines (LUNR) on Friday.

Siegmann downgraded LUNR's shares to hold from Buy, while lowering his price target to $18 from $20.

He cited "an unpredictable political climate, within and outside of NASA," referencing the increased volatility that Trump has ushered into the government.

Siegmann pointed to a decision that NASA is set to make soon on a contract for the Lunar Terrain Vehicle (LTV) that is being built to help astronauts navigate the moon when the space agency makes its impending return to the lunar surface. Intuitive Machines submitted its proposal for the vehicle in August.

The company was awarded $30 million in April 2024 after winning NASA's LTV feasibility assessment, which it used to build its Moon RACER.

Intuitive Machines is competing against Lunar Outpost and AstroLab for the LTV contract. NASA is only able to afford one company's rover, which means the other two companies will have spent the last two years developing an LTV that will never see the moon.

NASA indicated last month that it is "expected to make an award soon to develop, deliver, and demonstrate LTV on the lunar surface later this decade."

Siegmann said that Stifel believes the decision on a contract is "imminent," but added that the "unpredictable political climate" that exists at the moment "might introduce new uncertainty on whether the most qualified bid actually wins the competition."

Isaacman has a close professional relationship with Elon Musk, becoming one of the first two civilians to conduct a commercial spacewalk as part of Polaris Dawn, which was a collaboration between Isaacman and Musk.

During Isaacman's confirmation hearing, some Democrats raised concerns about his close ties to Musk since SpaceX has about $15 billion in contracts with NASA and senators raised questions about Isaacman showing favoritism toward Musk in future dealings. Musk actually recommended Isaacman fopr the top post at NASA.

Trump had nominated Isaacman in December 2024 for the role on the recommendation of Musk, but then withdrew the nomination after he and Musk had a falling out. However, the president eventually renominated Isaacman a second time.

Intuitive Machine's stock fell 5.5% on Friday following the downgrade.