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A wheel loader operator fills a ore truck at MP Materials Rare Earth Mine at Mountain Pass, California, January 30, 2020.
Steve Marcus | Reuters
The minor of the rare earth MP materials will benefit from an increasing strategic value for the United States, as geopolitical tensions with China make the offer of critical minerals more uncertain, according to Morgan Stanley.
The investment bank has improved MP documents to the equivalent of a purchase note with a stock market target of $ 34 per share, which involves 32% of Friday’s closure.
MP Materials has the only rare land mine in operation in the United States in Mountain Pass, California. China dominates the world market for rare earth refining and treatment, according to Morgan Stanley.
“Geopolitical and commercial tensions finally push the critical mineral supply chains,” said analysts led by Carlos de Alba in a note on Thursday. “MP is the ex-china of the most integrated Terre Rare Society.”
Beijing imposed export restrictions on seven rare elements in April in response to President Donald Trump’s prices. He maintained these restrictions in place despite commercial talks with us
Trump abolished certain restrictions on the Defense Production Act on Wednesday, which could allow the federal government to offer a higher market price to rare land. MP Materials is the best company positioned to benefit from it, according to Morgan Stanley. Its shares increased by more than 5% on Thursday.
MP materials are developing a fully domestic rare land supply chain in the United States and plans to start the commercial production of magnets used in most electric vehicle engines, offshore wind turbines and the future market for humanoid robots, according to Morgan Stanley.
The investment bank expects MP materials to show available cash flows this year and in 2026, but the company has a solid assessment should accelerate the available cash flows from 2027.
