** Equita downgrades Italian rocket maker Avio AVI.MI as the recent rally tied to investor optimism around space stocks now limits the upside compared to its target

** Avio shares have gained 35% since SpaceX officially filed for its IPO on May 20, boosting sentiment towards the sector

** However, the broker raises its TP by 9.5% to €46 ($53.6), confirms order intake estimates for 2026, and remains positive on the execution of Avio's industrial plan targets

** "We do not rule out that positive sector sentiment may last longer, also thanks to the inflows of both funds and specialized ETFs, but the upside compared to our target has been reduced," it says in a note

** Equita is now the only analyst out of five with a 'hold' rating; The other four have 'buy' recommendations – LSEG data

** Shares are down around 5%, underperforming Italy's all-share index .FTITLMS, which rises 0.1%

($1 = 0.8578 euros)