MP Materials Secures $500M Commitment from Apple, Boosting Rare Earth Magnet Demand
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6h ago
0mins
Source: Fool
- Rare Earth Production Surge: In Q3, MP Materials' neodymium-praseodymium oxide production soared 51% year-over-year to 721 metric tons, while overall rare earth oxides reached a record 13,254 metric tons, highlighting the company's critical role in the rare earth supply chain and expected growth in downstream magnet business.
- Government Partnership Assurance: The public-private partnership with the U.S. Department of Defense includes a 10-year price floor protection agreement at $110 per kilogram for NdPr products, reducing downside risk and enhancing earnings visibility, with a projected return to positive EPS of $0.07 in Q4, aligning with analyst expectations.
- Apple's Investment Impact: Apple's $500 million commitment to MP Materials, which includes long-term purchases of American-made rare earth magnets and the establishment of a dedicated recycling line, significantly improves demand visibility and reduces downside risk for the downstream magnetics business, with a $40 million prepayment already received.
- Collaboration with General Motors: MP Materials is working with General Motors on the commercial-scale qualification of permanent magnets, with sales expected to commence in the second half of 2026, further solidifying its critical role in the rare earth supply chain.
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: 61.060
Low
68.50
Averages
81.19
High
112.00
Current: 61.060
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.
