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Investing.com - Morgan Stanley (NYSE:MS) has resumed coverage of MP Materials (NYSE:MP) with an Equalweight rating and a price target of $65.00 on Thursday. According to InvestingPro data, the stock has delivered an impressive 290% return year-to-date, with analyst targets ranging from $30 to $69.
The investment bank’s decision follows significant changes to MP Materials’ business model, which has been "materially transformed" for the next decade and beyond, according to Morgan Stanley’s research note. With a market capitalization of $10.77 billion, MP Materials maintains strong liquidity with a current ratio of 4.12, though InvestingPro analysis indicates the company currently faces profitability challenges with a slim gross profit margin of 4.7%.
The transformation stems from MP Materials’ public-private partnership with the Department of Defense, which represents a major strategic alignment for the rare earth materials producer.
Additionally, the company has secured a commercial agreement with Apple (NASDAQ:AAPL) to provide recycled permanent magnets manufactured in the United States, further solidifying its business prospects.
Morgan Stanley indicated it has updated its financial estimates for MP Materials as part of its coverage resumption, reflecting these substantial business developments that have reshaped the company’s long-term outlook.
In other recent news, MP Materials Corp. announced the pricing of an upsized public offering of common stock at $55 per share, expecting gross proceeds of approximately $650 million. The company plans to sell 11,818,181 shares, with an option for underwriters to purchase additional shares to cover over-allotments. In connection with this, MP Materials also launched a $500 million underwritten public offering of its common stock. JPMorgan has raised its price target for MP Materials to $64 from $18, citing a significant deal with the Department of Defense. Additionally, DA Davidson reiterated its Buy rating and a $32 price target following MP Materials’ new $500 million multiyear partnership with Apple. This partnership involves producing rare earth magnets from 100% recycled materials and expanding processing capabilities at the Mountain Pass facility. These developments highlight MP Materials’ strategic moves and partnerships in the market.
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