MDA Space (MDA.TO) closed nearly 15% higher on Friday after Morgan Stanley upgraded the Canadian satellite and communications company.

The Brampton, Ontario-based company builds robotic applications for the shuttle and space station, as well as numerous satellite systems. Last week, it announced a new contract with the U.S. Missile Defense Agency. MDA did not disclose the amount of the agreement, which is related to the U.S. Scalable Homeland Innovative Enterprise Layered Defense (SHIELD) program.

The SHIELD contract program is designed to modernize the United States’ defense across land, sea, air, space, and cyberspace. This includes the United States’ “Golden Dome” missile defense strategy.

“While some investors have sharply discounted MDA on the grounds that the company’s Canadian DNA limits its ability to effectively compete for national security opportunities in the U.S. and Europe, we see multiple paths for MDA to play a role in external defense initiatives like Golden Dome,” Morgan Stanley analysts Christine Liwag and Justin Lang said in a note to clients on Friday.

Toronto-listed stocks have risen more than 37% since the start of 2026. The stock closed Friday at $36.29 per share, up 14.52%.

Liwag and Lang upgraded MDA stock from “equal weight” to “overweight” and raised their price target from $32 to $46.

Morgan Stanley notes that its stock price has been under pressure since key contracts were terminated last year. There were also concerns that Elon Musk’s SpaceX would become a key buyer for MDA’s satellite products.

“We believe a positive catalyst path in 2026 provides a rerating opportunity and could effectively allay market skepticism about future constellation opportunities set for MDA,” Liwag and Lang said.

“In our view, MDA offers compelling value for the pure play of space and is still paying dividends today.”

Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on X @jefflagerquist.