Picking themes of the future may seem easy on the surface. After all, it’s easy to assume that great exciting trends in health, science and technology are going to dominate the future. What is not so easy is picking the winners of those themes of the future. Investing in future trends can come with many pitfalls. There often many speculative companies, huge barriers to entry, issues of life and death, endless regulations, and potentially endless billions of dollars for capital spending and cash burn.

Space is one of the areas of the future that captures the imagination of millions of people in America alone. And it’s not just about Star Wars, Star Trek and the like. Billions of dollars are already being spent in the area of privatizing space. Many private sector opportunities exist, and then there are of course the endless billions worth of dollars spent by the world’s top governments on space.

Merrill Lynch’s Thematic Investing Strategy team has looked into the theme of investing in space. This is a speculative strategy compared to many investing themes, particularly considering that some of the great ideas and efforts still won’t be seen for well over a decade. The team sees a $339 billion space market today, but it sees the area being worth $2.7 trillion by 2045.

There are some big barriers to entry when it comes to space. Over $16 billion has been invested in start-ups targeting space since 2000, with 2016 seeing a record $2.8 billion in investments alone. Opportunities revolve around defense, launch, satellites, finance and more. And some of the world’s billionaires are heavily investing into space themes: space tourism, intercity rocket travel, asteroid mining, moon colonization, Mars, and deep space or interstellar exploration.

Again, there are big risks when it comes to investing in space. The technical risks are huge, like losing the life of the people trying to fulfill the goal. There are massive issues around unprofitability, failed launches and heavy regulations. There is even space debris risk and solar storms, all of which can serious wreck your day.

24/7 Wall St. has broken out nine of Merrill Lynch’s 70 or so companies listed. These nine companies all have Buy ratings, established businesses and upside expected by the team.

Ball

Ball Corp. (NYSE: BLL) is considered a space winner due to its metal container payload for launch vehicles with SpaceX and as a NASA space contractor. Merrill Lynch’s Buy rating is accompanied by a $47 price objective, implying about 18% upside. Ball shares are up only about 7% so far in 2017, and it has a 52-week trading range of $35.65 to $43.24 and a consensus analyst price target of $45.55.

Ball may be best known for food, beverage and product packaging, but it’s space systems build and integrate the instruments and spacecraft, with services from launch vehicle contracting and commissioning activities to mission control facilities and support — and even to and remote ground stations and data analysis.

Boeing

Boeing Co. (NYSE: BA) has many space-related efforts. Merrill Lynch has a Buy rating with a $290 price objective, roughly 10% higher than the recent $262 share price. Boeing has a 52-week range of $144.46 to $267.62 and a consensus price target of $280.15. Its stock is up about 68% so far in 2017, and it has been the best performance in the Dow Jones Industrial Average this year.

Boeing is involved in so many aspects of aerospace and defense that overlap with space that it may be hard to list it all. It is into launch, satellites, space systems, the space station, and so on.

Hexcel

Hexcel Corp. (NYSE: HXL) is considered to be a leading advanced structural materials provider, the leader in carbon fiber composites, and it is also used by SpaceX and Blue Origin. Hexcel is rated as Buy at Merrill Lynch, and the $70 price objective implies upside of 17% from the recent $60 share price. Hexcel has a 52-week range of $47.98 to $62.02. The consensus price target is $61.67. The stock is up about 17% so far in 2017.

Hexcel is into launchers and satellites, as well as payload carrier assembly, components and parts, and heat shields.

KBR

KBR Inc. (NYSE: KBR) is far more diversified than space operations, but Merrill Lynch included the company as an engineering services contract by NASA to support exploration missions. It also acquired Wyle in 2016 with a NASA space medicine contract. Merrill Lynch’s Buy rating comes with a $20 price objective, implying upside of 13.5% to the target. KBR has a 52-week range of $13.36 to $21.25, and its consensus price target of $21.58 is higher than Merrill Lynch’s target. KBR shares have risen only about 5.5% so far in 2017.

KBRwyle’s science and space operations services cover a broad spectrum of disciplines: life sciences, extreme environments, health and human performance, and spacecraft and ground systems mission support. It also monitors seismic activity and biological, chemical, and nuclear threats.

Lockheed Martin

Lockheed Martin Corp. (NYSE: LMT) is rated as Buy, and the firm’s $360 price objective implies upside of almost 15%. It has a 52-week range of $245.50 to $322.19 and a consensus analyst target of $327.47, and Lockheed Martin shares are up 25% so far in 2017.

Lockheed’s space-related efforts include space operations simulation, engineering documents, commercial space, a Mars base camp effort, GPS systems, Atlas rockets and many more.

Northrop Grumman

Northrop Grumman Corp. (NYSE: NOC) has a Buy rating and a $350 target price, some 16% higher than the recent $300 share price. The acquisition of Orbital ATK, being an ISS supplier for NASA and having scaled composites, gives it upside and a medium concentration of space as its business. Northrop Grumman shares are up 29% so far in 2017, and it has a 52-week range of $220.72 to $306.61. The defense giant has a consensus price target of $318.18.

Northrop Grumman is another legacy space player, dating back to the dawn of the space age. It offers systems engineering, spacecraft manufacturing, precision sensors, space instrument design, ground stations development and orbiting space platforms.

Raytheon

Raytheon Co. (NYSE: RTN) has a Buy rating at Merrill Lynch, and the $220 price objective implies upside of close to 20% from the recent $184 share price. Raytheon has a 52-week range of $137.70 to $190.25 and a consensus price target of $202.61. Its stock has seen a gain of almost 30% so far in 2017.

Raytheon is into guidance computers, cybersecurity, earth monitoring, data dissemination and image transmitters, and it provides critical intelligence. Raytheon’s microwave amplifier is said to have beamed back the first lunar images and delivered Neil Armstrong’s famous transmission, “One small step for a man, one giant leap for mankind.”

ViaSat

ViaSat Inc. (NASDAQ: VSAT) is a satellite company with core businesses around government and commercial communications. Merrill Lynch’s Buy rating comes with a $74 price objective, barely higher than the $72.50 price seen this week. Shares have traded between $57.75 and $76.87 in the past year, and the consensus price target is $67.20. ViaSat shares, despite being above the consensus target price, have generated returns of only about 10% year to date.

ViaSat is a satellite leader, for communications, data controllers, high-capacity for government and shipboard communications.

XL Group

XL Group Ltd. (NYSE: XL) may be considered a reinsurance company, but it is also a leader in space and satellite insurance. Though Merrill Lynch has a Buy rating, the stock recently was removed from Merrill Lynch’s prized US 1 List (focus list). The firm’s $47 price objective implies just over 20% upside. CFRA (S&P) has an even more ambitious $49 target price, but investors have to understand that there are many other areas like weather, marine, health, transport, professional, consumer, food and more that you have to factor in here on top of space insurance.

XL Group has a 52-week range of $35.70 to $47.27 and a consensus price target of $44.86. This stock has been the slowest performer of the lot in 2017, with a total return of less than 5%.

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