IperionX (ASX:IPX) is well positioned to benefit from rising demand for titanium and strong US government support, with its technology offering significant cost advantages and the Titan project providing further upside, Jefferies said in a Wednesday note.
Jefferies said the company should benefit from reshoring efforts and long-term demand growth in electric vehicles, drones, space launch vehicles and satellites, while a shortage of Western titanium supplies is expected to support the company and maintain policy backing across administrations.
The company aims to produce around 1,400 metric tons of titanium per year by 2027, scaling to more than 10,000 metric tons per year by 2030, with full mine-to-finished-product integration expected between the second half of 2028 and the first half of 2029.
The investment firm projects the company's process innovations could cut energy consumption by about 90%, capital expenditure by 70% to 80%, and operating costs by roughly 50%, compared with existing high-purity titanium powder producers.
Jefferies estimates 2027 earnings before interest, taxes, depreciation and amortization at $28 million at a realized average selling price of $50 per kilogram, with every $5 per kilogram increase adding $7 million, and values Titan project at $15 per share, rising $3 per share on a final investment decision but falling $5 per share if financing is delayed.
It noted that US government support, including up to $99 million in Department of Defense procurement, feedstock transfers and financing, should largely offset risks from execution, scale-up, powder qualification, Titan final investment decision timing and potential dilution.
Jefferies started coverage on IperionX with a buy rating and a $26 price target.