‘Boom.’ Rare-Earth Stock Gets Huge Target-Price Boost. Shares Jump Again.

Piles of raw ore sit at the Mountain Pass mine, operated by MP Materials, in Mountain Pass, Calif., in 2019. (Joe Buglewicz/Bloomberg)

Shares of rare-earth miner MP Materials have left Wall Street in the dust. One analyst is playing catch-up.

Friday, Canaccord analyst George Gianarikas more than doubled his price target for MP stock to $55 a share from $27. He kept a Buy rating on the shares in a report that simply starts with “Boom.”

MP stock traded as high as $50.98 on Friday, but closed down 0.3% at $45.11. The S&P 500 and Dow Jones Industrial Average dropped 0.3% and 0.6%, respectively.

The price target increase came after MP stock soared 51% on Thursday after the company announced a deal with the Defense Department that provided capital and favorable pricing for the rare earths it produces.

The move is part of the Defense Department’s plan to help wean the U.S. off Chinese-produced rare-earth metals. The aim is to re-establish an American supply chain for critical minerals.

Rare-earth materials end up in things such as magnets for electric motors and in navigation equipment. An F-35 fighter jet has more than 900 pounds of rare earths in it.

China is the global leader in mining rare earths. In 2024, it mined about 270,000 metric tons of rare-earth oxides out of a worldwide total of 390,000 metric tons; the U.S. mined only about 45,000 metric tons. China also dominates the refining process of rare earths, controlling about 85% of worldwide capacity.

MP Materials is the largest producer of rare earths in the Western Hemisphere, making neodymium and praseodymium oxides, two rare earth elements among a list of more than a dozen. It has long been a play on U.S. rare earth manufacturing and relatively popular on Wall Street.

Eight out of 11, or 73%, of analysts covering the stock rate shares Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%.

Up until recently, the average analyst price target was only about $25 a share, not too surprising considering the stock started 2025 at less than $16 a share.

More price-target increases are likely coming.

The deal is “a ginormous, big, beautiful trump card that accelerates U.S. rare earth magnetic independence, pushes back on China’s mercantilist policies to artificially dampen the price of rare earths, and, over time, removes a Chinese negotiating lynch-pin that left U.S. interests vulnerable,” Gianarikas wrote. It’s a “bold, aggressive public-private partnership; a win (for MP) win (for the U.S., strategically) [and a] win for Western consumers/industrial complex.”

For MP, the impact on financials is potentially, well, ginormous.

Wall Street’s consensus estimate for 2028 earnings before interest, taxes, depreciation, and amortization, or Ebitda, jumped to $414 million from $225 million following the Defense Department news, according to FactSet. The consensus call for Ebitda in 2030 went to $742 million from $364 million.

Gianarikas’ Ebitda estimates for 2028 and 2030 are $547 million and $881 million, respectively. That is based on rare-earth magnet production eventually reaching 10,000 metric tons a year, up from plans to produce closer to 3,000 metric tons before the Defense Department stepped in.

MP produces raw materials for rare-earth magnets today. Some of it ends up being processed in China, although that is changing. MP Materials processes about 40% its rare-earth concentrate. The company also makes magnetic materials at a plant in Fort Worth, Texas.

Write to Al Root at allen.root@dowjones.com