Citing its enviable position on the global market, a pundit just became a bull on the rare earths miner.
Rare earth materials have been very much in the news lately, particularly with the recent U.S.-China trade spats. Because of this, the only rare earth miner native to our country, MP Materials (MP +9.71%), has come on the radar of many investors in recent months.
Happily for those individuals, MP Materials stock had quite a memorable Monday. Thanks in no small part to an analyst’s recommendation upgrade, the shares rose by nearly 10% across that trading session. That compared well to the benchmark S&P 500‘s (^GSPC +1.54%) 1.5% bump higher.
A shift to a bullish stance
The upgrading party was Deutsche Bank. Before market open, the bank‘s Corinne Blanchard raised her evaluation of MP Materials’ equity to a buy from her previous hold. She also made a slight increase to her price target, which now stands at $71 per share from $68.
Image source: Getty Images.
According to reports, Blanchard’s new take is based on her view that rare earths will continue to be valuable materials in the middle-to-long time frames. This, combined with the fact that MP Materials is backed by the federal government, makes it a compelling buy.
In July, the Department of Defense (DoD) signed an agreement with the company, under which it promised an equity investment and price floors, among other supportive measures.
MP Materials
Today’s Change
(9.71%) $5.69
Current Price
$64.29
Key Data Points
Market Cap
$10B
Day’s Range
$60.44 – $65.91
52wk Range
$15.56 – $100.25
Volume
852K
Avg Vol
15M
Gross Margin
-2627.54%
Dividend Yield
N/A
Bottom-line beat
It also doesn’t seem coincidental that Blanchard’s upgrade comes mere days after MP Materials reported third-quarter results. The company booked revenue of $53.6 million, which was down by 15% year over year and missed the consensus analyst estimate.
However, the company managed to narrow its net loss not according to generally accepted accounting principles (GAAP). This deficit was $17.8 million, or $0.10 per share, against the year-ago shortfall of $19.6 million. That $0.10 was much narrower than the $0.17 collectively modeled by those prognosticators.