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Investing.com -- BMO Capital Markets upgraded MP Materials to Outperform, saying the recent drop in rare earth prices and a pullback in the shares create an attractive entry point for a company it sees as central to US efforts to build a domestic supply chain.
The brokerage set a $75 price target.
Analysts said rare earth valuations have eased since China rolled back export bans and tensions with the US cooled.
They argued that the move does not weaken the long term investment case, noting that the recent trade dispute underscored how exposed the US remains in securing critical minerals.
BMO expects policy goals around onshoring to continue irrespective of the latest thaw.
The bank highlighted fresh upside from MP’s joint venture in Saudi Arabia with Maaden and the DoW.
BMO models the partnership producing about 2,000 tonnes a year of NdPr oxide from 2028, with the DoW funding MP’s share of development costs. It said that contribution, combined with the recent share decline, supports a rerating from current levels.
The focus now is on execution. BMO pointed to the ramp up at Independence as a key milestone, saying successful delivery could support multiple expansion.
It also cited potential incremental contributions from Apple related recycling volumes and new offtake agreements that could command stronger pricing than the current DoW contract.
BMO said MP’s strategically important assets justify a premium valuation to peers and that the company remains in the early stages of a long term thematic tied to security of supply for US critical minerals.