-- MP Materials (MP) has raised its status from a speculative commodity investment subject to Chinese prices to a stable, US-backed asset with downside protection and contracts for years of growing demand, Wedbush said in a Monday note.
The company has emerged as America's "rare earth national champion" with its ownership of Mountain Pass Mine in California, Wedbush analysts said.
With China controlling about 60% of global mining and 90% of downstream processing and magnet manufacturing, supply independence for the critical materials become top priority amid tensions between the two superpowers, the analysts said.
US government support, including a $400 million equity investment from the Department of Defense, a guaranteed 10-year price floor for Neodymium-praseodymium oxide, and guaranteed purchases of magnets, is expected to protect MP Materials against price crashes and Chinese oversupply risks, according to the note.
Aside from the agency, Apple (AAPL) and General Motors (GM) are set to provide a steady stream of orders, and its facility in Northlake, Texas, is expected to be commissioned in 2028, the note said.
These factors make MP Materials a "uniquely derisked" investment opportunity, the analysts said.
Wedbush initiated coverage of the company's stock with a rating of outperform and a price target of $90.
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