Hold Rating for MP Materials Amid Financial Challenges and Strategic Opportunities

In a report released today, Bill Peterson from J.P. Morgan maintained a Hold rating on MP Materials (MP – Research Report), with a price target of $18.00.

Bill Peterson has given his Hold rating due to a combination of factors impacting MP Materials. The company’s financial outlook is currently challenged by halted REO sales, leading to an expected EBITDA loss for FY25. However, there is a positive outlook for the Magnetics segment, which has shown better-than-expected profitability, and management anticipates growing revenues with improved margins over the next year. Despite these positive developments, the midstream unit costs remain high, and the anticipated reduction in costs is seen as a ‘show-me story’ due to ongoing midstream ramping.
Additionally, the uncertain macroeconomic environment and geopolitical tensions, particularly involving China’s tariffs, pose financial headwinds for MP Materials. While there is potential for MP to become a ‘Western Champion’ and benefit from partnerships or government support, these developments are expected to take time. The company’s shares have shown volatility, and while there is a premium valuation due to its strategic position, the current market conditions and execution risks justify a Hold rating with a price target of $18 by December 2025.

According to TipRanks, Peterson is an analyst with an average return of -9.4% and a 36.31% success rate. Peterson covers the Basic Materials sector, focusing on stocks such as MP Materials, Steel Dynamics, and United States Steel.

In another report released on May 8, Morgan Stanley also maintained a Hold rating on the stock with a $23.00 price target.