USA Rare Earth Secures $1.3 Billion Loan from Commerce Department

Written by Emily J. Thompson, Senior Investment Analyst

USAR-1.38%

MP+5.19%

LAC+4.84%

Source: CNBC

Updated: 1d ago

0mins

Source: CNBC

Funding Support: USA Rare Earth announced a letter of intent from the Department of Commerce to provide a $1.3 billion loan and $277 million in federal funding, significantly enhancing the company's financial strength and market competitiveness.
Stock Surge: Following the announcement, the company's stock soared over 20% in premarket trading, reflecting a positive market reaction to the financing news, which may attract more investor interest.
Strategic Investment: The funding will be used to build a magnet manufacturing plant in Stillwater, Oklahoma, and to mine rare earth deposits at Round Top in Texas, marking a significant step towards enhancing U.S. independence in critical mineral supply chains.
Policy Context: The Trump administration is focused on establishing a Western rare earth and critical minerals supply chain to reduce dependence on China, with the Secretary of Commerce stating that this project is essential for restoring U.S. critical mineral independence, highlighting its far-reaching strategic implications.

USAR

$26.35+Infinity%1D

Analyst Views on USAR

Wall Street analysts forecast USAR stock price to fall 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: 26.720

Low

15.00

Averages

22.75

High

28.00

Current: 26.720

Low

15.00

Averages

22.75

High

28.00

Benchmark

Subash Chandra

Buy

upgrade

$15 -> $45

2026-01-27

New

Reason

Benchmark

Subash Chandra

Price Target

$15 -> $45

AI Analysis

2026-01-27

New

upgrade

Buy

Reason

Benchmark analyst Subash Chandra raised the firm's price target on USA Rare Earth to $45 from $15 and keeps a Buy rating on the shares after the company secured 85% of the $4.1B of capital required to achieve full integration, including the government funding $1.9B. The firm, which is "surprised by the scale of the transaction," notes that its prior price target reflected 5,000 mta of magnet-making capacity and that its revised target reflects a doubling of capacity to 10,000 mta, upstream revenues from Round Top and midstream revenues from metal-making, and third party concentrate processing.

Canaccord

Buy

maintain

$23 -> $33

2026-01-27

New

Reason

Canaccord

Price Target

$23 -> $33

2026-01-27

New

maintain

Buy

Reason

Canaccord raised the firm's price target on USA Rare Earth (USAR) to $33 from $23 and keeps a Buy rating on the shares after the company announced a letter of intent with the U.S. Department of Commerce and a collaboration with the U.S. Department of Energy. The Department of Commerce's CHIPS Program provided a letter of intent to USA Rare Earth covering a total of $1.6B. Canaccord updated the company's estimates to account for an accelerated operational schedule. While USA Rare Earth arrangement lacks the price floors, profitability guarantees, and offtake agreements inherent in the government's MP Materials (MP) deal, which is a "structural deficiency," management believes that an off-take agreement and pricing support are not essential to support the business model, the analyst tells investors in a research note.

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Roth Capital

Suji Desilva

Buy

upgrade

$25 -> $35

2026-01-26

New

Reason

Roth Capital

Suji Desilva

Price Target

$25 -> $35

2026-01-26

New

upgrade

Buy

Reason

Roth Capital analyst Suji Desilva raised the firm's price target on USA Rare Earth to $35 from $25 and keeps a Buy rating on the shares. The firm cites the company having announced that it has secured favorable debt and equity funding from the U.S. government with a concurrent $1B PIPE financing, which serves to relatively fully fund plans to establish domestic production, including rare element/critical mineral extraction at Round Top by end of the decade, the analyst tells investors in a research note. The additional planned actions driven by funding availability greatly improve the company's chance of establishing the domestic end-to-end rare earth value chain that it is targeting within the next several years, Roth added.

Benchmark

Subash Chandra

maintain

$15

2026-01-22

Reason

Benchmark

Subash Chandra

Price Target

$15

2026-01-22

maintain

Reason

After USA Rare Earth announced a next step in the accelerated commercialization of the Round Top mine and selected Flour and WSP as Engineering, Procurement, and Construction Management partners for the definitive feasibility study, Benchmark analyst Subash Chandra noted that the "path to commerciality looked long and unlikely when we initiated on USAR last February," but adds that the firm now expects a "timely and conclusive DFS" for Round Top. The firm, which adds that it is "safe to say the mine has significant value at prevailing rare earths prices," has a Buy rating and $15 price target on USA Rare Earth shares.

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.