TLDR
- MP Materials stock rose 1.8% to $69.58 Friday ahead of Monday’s $1.6 billion USA Rare Earth government investment announcement
- Shares have surged 217% over the past year with analysts maintaining “Moderate Buy” rating and $78.91 average price target
- DCF valuation suggests stock trades 41.8% below intrinsic value of $117.45 per share
- Company expected to turn profitable in fiscal 2026 with consensus EPS forecast of $0.72
- Next earnings report scheduled February 19, 2026 will provide operational updates on magnet production plans
MP Materials shares gained 1.8% Friday, closing at $69.58. The move comes as the Trump administration prepares to announce a 10% stake in USA Rare Earth worth $1.6 billion.
The deal will be unveiled Monday with an investor conference call. Sources told Reuters the government investment aims to strengthen U.S. critical minerals supply chains.
MP stock has climbed 217% over the past year. Recent performance includes 25.4% gains over 30 days and 24.4% returns year to date.
Friday’s session saw shares trade between $66.25 and $70.45. The company now holds a market cap of approximately $12.33 billion.
Valuation Shows Upside Potential
A discounted cash flow analysis values MP at $117.45 per share. That represents 41.8% upside from recent trading levels.
The company reported negative free cash flow of $294.49 million in the latest twelve months. Forecasts show this flipping to positive $436 million by 2030.
MP trades at a price-to-book ratio of 6.17x. This exceeds both the metals and mining sector average of 2.69x and peer group average of 4.01x.
The stock currently posts a negative P/E ratio of roughly 98. Analysts expect profitability in fiscal 2026 with earnings per share around $0.72.
Rare earths encompass 17 minerals essential for magnets in missiles and electric vehicles. Most processing occurs outside the United States.
MP already secured Defense Department backing in July. The government became the largest shareholder and guaranteed minimum prices for key rare earths.
Ryan Castilloux of Adamas Intelligence called it “a game changer for the ex-China industry.” The new USA Rare Earth funding could further validate domestic production efforts.
Production Plans Take Shape
Matt Sloustcher, MP’s executive VP for corporate affairs, stated in December the company will have magnet capacity online within three years. Plans include production partnerships with General Motors.
However, the USA Rare Earth deal introduces competitive dynamics. Government-backed rivals could challenge MP’s market position.
Institutional activity shows Baillie Gifford recently reduced its stake. Previous quarters also saw insider selling from executives including the CEO and CFO.
Analyst Outlook Remains Positive
Wall Street maintains a “Moderate Buy” consensus. Thirteen analysts rate the stock Buy, one Strong Buy, and one Sell.
The average 12-month price target sits at $78.91, implying mid-teens upside. Individual targets range from $71 at Morgan Stanley to $112 at Bank of America.
DA Davidson set an $82 target while other analysts provided $77 estimates. The bullish case centers on magnet production scaling and policy support.
Key risks include valuation relative to current losses and unpredictable rare earth pricing. Project delays could impact cash flow and force revised outlooks.
Monday’s USA Rare Earth call will detail investment terms and timelines. Investors will watch for signals about additional federal agreements.
MP reports fourth-quarter 2025 earnings February 19, 2026. The release will provide updates on processing capabilities and magnet manufacturing progress.
