MP Materials Secures $400M Partnership with DOD for Rare Earth Magnets
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1d ago
0mins
Source: Fool
- Strategic Partnership: MP Materials has secured a $400 million partnership with the Department of Defense, ensuring a price floor of $110 per kilogram for NdPr over the next decade, thereby enhancing the company's pricing power and long-term revenue security in the rare earth market.
- Supply Chain Integration: The company is establishing a magnet factory in Fort Worth, Texas, and plans to launch the 10X Facility in the near future, which will further enhance its vertical integration capabilities and ensure a stable supply of rare earth metals, strengthening its competitive position.
- Deal with Apple: MP Materials has signed a multiyear $500 million agreement with Apple to supply 100% recycled rare earth magnets, with Apple prepaying $200 million, which not only boosts MP's revenue stream but also strengthens its market position in sustainability.
- Stock Performance: Over the past 12 months, MP Materials' stock has surged over 230%, meaning a $1,000 investment a year ago would now be worth approximately $3,500, highlighting the company's strong growth potential in the rare earth sector.
Analyst Views on MP
Wall Street analysts forecast MP stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MP is 81.19 USD with a low forecast of 68.50 USD and a high forecast of 112.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
14 Analyst Rating
11 Buy
3 Hold
0 Sell
Strong Buy
Current: 58.620
Low
68.50
Averages
81.19
High
112.00
Current: 58.620
Low
68.50
Averages
81.19
High
112.00
About MP
MP Materials Corp. produces specialty materials that are vital inputs for electrification and other advanced technologies. The Company owns and operates the Mountain Pass Rare Earth Mine and Processing Facility (Mountain Pass) located in California. It is also developing a rare earth metal, alloy and magnet manufacturing facility in Fort Worth, Texas (Independence Facility). The Company’s segments include Materials and Magnetics. The Materials segment operates Mountain Pass, which produces refined rare earth products as well as rare earth concentrate and related products. The Materials segment primarily generates revenue from sales of rare earth concentrate, primarily sold for further distribution to a single, principal customer in China, and sales of neodymium-praseodymium (NdPr) oxide and metal, primarily sold to customers in Japan, South Korea, and broader Asia. The Magnetics segment operates the Independence Facility, where it produces magnetic precursor products.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
