Trump Administration to Invest $1.6B in USA Rare Earth for 10% Stake
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: seekingalpha
- Government Investment Scale: The Trump administration is set to invest $1.6 billion in USA Rare Earth for a 10% equity stake, marking the largest U.S. investment in the rare earth sector, underscoring the government's focus on critical resources.
- Equity and Financing Structure: The government will receive 16.1 million shares and warrants for another 17.6 million shares of USA Rare Earth, priced at $17.17 each, with the announcement expected on Monday, enhancing the company's capital structure.
- Debt Financing Support: USA Rare Earth will also secure $1.3 billion in senior secured debt financing from a facility created for the U.S. Department of Commerce, aimed at supporting sustainable development in the rare earth industry.
- Positive Market Reaction: Shares of USA Rare Earth have more than doubled this month, with a 40% increase this week alone, reflecting market optimism regarding the government investment and the industry's future prospects.
Analyst Views on USAR
Wall Street analysts forecast USAR stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for USAR is 22.75 USD with a low forecast of 15.00 USD and a high forecast of 28.00 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.
5 Analyst Rating
5 Buy
0 Hold
0 Sell
Strong Buy
Current: 22.710
Low
15.00
Averages
22.75
High
28.00
Current: 22.710
Low
15.00
Averages
22.75
High
28.00
About USAR
USA Rare Earth, Inc. is a supplier of sintered neo magnets and other rare earth metals. The Company is engaged in developing a NdFeB magnet manufacturing plant in Stillwater, Oklahoma, and intends to establish domestic rare earth and critical minerals supply, extraction, and processing capabilities to both supply its magnet manufacturing plant and market surplus materials to third parties. It is focused on developing domestic rare earth production that offers sustainable and secure domestic supply of materials critical to key industries. Its vertically integrated approach consists of sourcing rare earth elements (REEs), in addition to other critical minerals such as gallium, to producing finished NdFeB magnets. The Company serve a variety of industries, such as defense, robotics, electric vehicles, wind power, appliances, cordless tools and computing and semiconductors. The Company owns, Less Common Metals Ltd., which is a scaled ex-China rare earth metal and alloy manufacturer.
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.
