TLDR
- MP Materials stock climbed 2.5% in premarket after BMO Capital’s upgrade to Outperform from Market Perform
- Price target reduced slightly from $76 to $75 as rare-earth prices pulled back following eased China trade tensions
- Stock down 22% over past month but still up over 250% year-to-date on U.S. supply chain concerns
- 88% of analysts rate MP shares Buy with average price target at $79, representing 40%+ upside potential
- Defense Department deal and Saudi Arabia joint venture support long-term growth outlook
MP Materials received an upgrade from BMO Capital on Monday morning. The rating change came with an unusual twist.
Analyst Raj Ray upgraded MP from Market Perform to Outperform. But he also lowered his price target by $1 to $75. The stock gained 2.5% in premarket trading to $56.65.
The move reflects the choppy trading environment for rare-earth stocks. MP shares have swung wildly in recent months based on U.S.-China relations.
Back in early October, the stock surged past $100 per share. China had threatened to restrict rare-earth exports at the time. Those threats pushed investors into domestic producers like MP.
The stock fell back to earth when trade negotiations improved. China agreed to keep shipping rare-earth materials. Over the past month, MP shares dropped 22%.
Despite the recent decline, the stock remains up more than 250% in 2025. That gain reflects growing interest in securing domestic rare-earth supply chains.
China Controls the Market
Ray’s upgrade centers on America’s rare-earth dependence. China controls roughly 85% of global rare-earth processing capacity. This dominance creates national security risks for the United States.
Ray wrote that U.S. vulnerability “has become blatantly apparent.” He believes this strategic importance outweighs short-term price volatility in rare-earth materials.
Rare-earths are critical for modern technology. They go into iPhones, electric vehicles, and military equipment. The materials are essential for national defense.
MP operates the Mountain Pass mine in California. It’s the largest rare-earth production facility in the Western Hemisphere.
Defense Department Partnership Boosts Outlook
The Defense Department signed a major deal with MP in July. The agreement includes an equity stake in the company. It also provides a price floor for rare-earth materials and guaranteed purchases of magnets.
MP is building capacity to produce rare-earth magnets domestically. The Defense Department will be a guaranteed customer for these products.
BMO Capital highlighted MP’s joint venture in Saudi Arabia as another growth driver. The company is partnering with Saudi Arabian Mining Company to build a refinery. The U.S. Department of War is also involved in the project.
The Saudi venture aims to rebalance global rare-earth supply chains. It’s part of a broader strategic cooperation between the United States and Saudi Arabia.
Analysts Remain Bullish
Wall Street maintains a positive view on MP stock. FactSet data shows 88% of analysts rate shares Buy. The average Buy rating for S&P 500 stocks is only 55%.
The average analyst price target sits at $79 per share. That’s more than 40% above Friday’s closing price of $55.27.
Goldman Sachs recently started coverage with a Buy rating. DA Davidson and JPMorgan also maintain positive ratings on the stock.
BMO stated that MP’s assets “will continue to warrant a premium multiple versus peers.” The firm called current price levels “an attractive entry point” for investors.
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