This Key Rare Earth Player Received A Ratings Boost From Morgan Stanley – Can It Prompt Another Rally?

• Morgan Stanley bet on the company’s position to capitalize on the U.S. government’s push to set up a robust rare earth supply chain.
• The firm added that growing diversification among magnet buyers could open the door to more commercial agreements for MP.
• MP Materials has strong federal backing, with the U.S. government owning a 15% stake in the company.

Shares of MP Materials (MP) gained 3% on Friday after Morgan Stanley bet on the company’s position to capitalize on the U.S. government’s push to set up a robust rare earth supply chain.

Morgan Stanley upgraded MP Materials’ stock to ‘Overweight’ from ‘Equal Weight’ and increased its price target to $71, up from $68.50, according to TheFly. The new target implies a potential upside of 15% from the stock’s closing price on Thursday.

The firm noted that MP Materials stands to gain as the U.S. accelerates efforts to build a rare-earth supply chain outside China. It added that growing diversification among magnet buyers could open the door to more commercial agreements for the company.

Key Player In Rare Earth Push

MP Materials has emerged as an important player as the U.S. and its allies rush to establish a robust supply chain for rare-earth magnets, which are critical for defense applications, electric vehicles, electronics, and wind turbines, among other applications.

In July, the U.S. government became a top shareholder in the company by taking a 15% stake for $400 million. The firm had also received a $1 billion loan commitment from JPMorgan Chase Funding Inc. and Goldman Sachs Bank USA to construct its 10X magnet manufacturing facility. With commissioning expected in 2028, MP Materials’ total U.S. rare-earth magnet manufacturing capacity is estimated to reach 10,000 metric tons.

Last month, MP established a three-way joint venture with Saudi Arabia’s state-owned miner Maaden and the U.S. Department of War to build a major rare-earth refinery in the kingdom. The company said it was also exploring opportunities to support or collaborate on magnet production within Saudi Arabia.

On Thursday, Jarrod Agen, executive director of the National Energy Dominance Council, said the U.S. government intends to take additional equity stakes in critical minerals companies as part of a broader effort to reduce China’s grip on global raw material supply chains. China controls about 70% of global rare-earth mining and nearly 90% of processing capacity.

The remarks follow a new Notice of Funding Opportunity issued this week by the Department of Energy’s Office of Critical Minerals and Energy Innovation, which offers up to $134 million to strengthen domestic rare earth supply chains.

How Did Stocktwits Users React?

Retail sentiment on Stocktwits changed to ‘bearish’ from ‘extremely bearish’ in the past 24 hours.

The stock has seen significant buying interest throughout the year, surging nearly 300%.

Also read: Southwest Airlines Joins Peers In Slashing 2025 Profit Outlook, Citing Shutdown Pain

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