TLDR
- USA Rare Earth stock rose 4.4% to $28.94 after receiving a Buy rating from William Blair analyst Neal Dingmann on Monday.
- Australia’s Prime Minister Anthony Albanese plans to offer the country’s rare earth resources to the U.S. to reduce dependence on China’s market dominance.
- The analyst believes the U.S. government may announce another large investment in USA Rare Earth, similar to the Defense Department’s deal with MP Materials in July.
- USA Rare Earth operates a research facility, magnet manufacturing plant, and owns majority of the Round Top mine in Texas, with production starting soon.
- MP Materials stock has jumped over 400% this year and gained 2.2% on Monday, while Australian miner Lynas Rare Earth rose 6.6% in overseas trading.
USA Rare Earth stock climbed 4.4% to $28.94 in early Monday trading. The move came after William Blair analyst Neal Dingmann launched coverage with a Buy rating.
Dingmann expects the stock to outperform the broader market. He didn’t set a specific price target but highlighted the company’s integrated operations as a key strength.
The analyst pointed to USA Rare Earth’s research facility, magnet manufacturing plant, and majority ownership of the Round Top mine in Texas. The company recently acquired Less Common Metals, adding metal-making and strip-casting capabilities to its operations.
USA Rare Earth doesn’t generate substantial revenue yet. The company’s projects remain under development.
That hasn’t deterred investors. The stock was already up 142% year-to-date before Monday’s gains.
The rare earth sector has attracted intense attention after China threatened export controls. China controls most of the world’s rare earth production and processing.
These materials go into electric vehicles, wind turbines, and fighter jets. The potential supply disruption created national security concerns for the U.S.
Government Investment Speculation
Dingmann suggested the U.S. government might announce another major investment in USA Rare Earth. He called it a “hot take” in his research report.
Such a deal would follow the Defense Department’s blockbuster agreement with MP Materials in July. That deal included an equity stake, a price floor for rare earth products, and guaranteed magnet purchases.
MP Materials operates the largest rare earth production facility in the Western Hemisphere. The stock has surged more than 400% this year and gained 2.2% on Monday to $82.51.
Five analysts now cover USA Rare Earth according to FactSet. All five rate the stock as a Buy.
The average analyst price target sits at $24. That’s below current trading levels, but recent targets have moved closer to $30 per share.
Australian Supply Agreement
Bloomberg reported Sunday that Australian Prime Minister Anthony Albanese will offer his country’s rare earth resources to help break China’s market control. President Donald Trump and Albanese were scheduled to meet Monday.
The Australian announcement added fuel to the sector’s rally. Lynas Rare Earth, an Australian mining company, jumped 6.6% in overseas trading.
The S&P 500 rose 0.6% while the Dow Jones Industrial Average gained 0.4% in early trading. USA Rare Earth’s magnet facility is preparing to begin production.
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