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Investing.com - DA Davidson has reiterated its Buy rating and $32.00 price target on MP Materials (NYSE:MP) following the company’s announcement of a new partnership with Apple (NASDAQ:AAPL). The stock, currently trading near its 52-week high of $62.87, has surged 94% in the past week alone. According to InvestingPro analysis, the stock appears overvalued at current levels.
MP Materials revealed Wednesday that it has secured a $500 million multiyear partnership with Apple to produce rare earth magnets from 100% recycled rare earth material. The agreement includes expanded processing capability at the company’s Mountain Pass facility.
The partnership includes a $200 million prepayment from Apple for the purchase of magnets from MP Materials. The magnets will be produced at MP Materials’ Independence facility.
DA Davidson analyst Matt Summerville noted that this new agreement comes shortly after MP Materials announced what he described as a "transformative deal" with the Department of Defense.
The analyst highlighted that these recent developments demonstrate MP Materials’ continued expansion of its commercial momentum in the rare earth materials sector.
In other recent news, MP Materials has announced a significant multibillion-dollar partnership with the U.S. Department of Defense (DoD), which involves a $400 million equity investment and a $150 million loan to expand its rare earth capabilities. This partnership is set to make the DoD the company’s largest shareholder with a potential 15% stake, and it includes a price floor of $110 per kilogram for neodymium-praseodymium (NdPr) products. The agreement also supports MP Materials’ plan to increase its magnet production capacity tenfold, with a new facility expected to produce 10,000 metric tons per year by 2028. TD Cowen has responded to this development by more than doubling its price target for MP Materials to $55, maintaining a Buy rating. Similarly, Canaccord Genuity has raised its price target to $64, citing increased demand from major clients like Apple and General Motors (NYSE:GM). DA Davidson also reiterated its Buy rating and a $32 price target, highlighting the transformative nature of the DoD partnership. These developments underscore MP Materials’ strategic expansion in the rare earth materials sector, with analysts projecting significant growth and increased cash flow potential.
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