Shares of MP Materials (MP) are up nearly 10% after Wall Street investment bank Goldman Sachs (GS) said investors should buy the rare-earth miner’s stock.
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Analysts at Goldman Sachs initiated coverage of MP stock with a Buy rating and a $77 price target. The investment bank is bullish on MP Materials, noting that the Las Vegas-based company is the largest rare-earth miner in North America and citing a deal with the U.S. Defense Department to acquire its rare earth metals, minerals and magnets.
This past summer, the Pentagon and MP Materials inked an agreement for rare-earth supplies that includes an equity stake by the U.S. federal government, a price floor for rare-earth materials, and a guaranteed customer for the rare-earth products MP Materials produces now and in the future.
MP Materials’ Saudi Arabia Deal
Also helping MP stock on Nov. 20 is news of a deal the company struck with the U.S. Defense Department and the Saudi Arabian mining company Maaden. The trio is forming a joint venture in Saudi Arabia for the refining of rare-earth elements that are used in everything from electric vehicles and smartphones to guided missile systems and advanced fighter jets.
As part of the deal, MP Materials doesn’t have to provide any capital, only its expertise. “We are honored that the U.S. government asked MP to partner on a project of this magnitude and importance for America and its allies,” said MP CEO James Litinsky in a news release.
Is MP Stock a Buy?
The stock of MP Materials has a consensus Strong Buy rating among 14 Wall Street analysts. That rating is based on 11 Buy and three Hold recommendations issued in the last three months. The average MP price target of $81.19 implies 26.07% upside from current levels.
