USAR Stock Climbs Overnight After 2 Analysts Turn Bullish On $2.8B Brazil Rare Earth Deal: Here's Their Domestic Supply Chain Thesis

• Roth cited USA Rare Earth’s growing operations, saying the Serra Verde deal boosts its mining and processing capabilities.
• Serra Verde is expected to produce about 6,400 metric tons annually by 2027, generating $550 million to $650 million in EBITDA.
• Wedbush began coverage with an ‘Outperform’ rating and a $29 target price, implying 28% upside, citing plans for a fully domestic rare-earth-to-magnet supply chain.

USA Rare Earth, Inc. (USAR) shares gained overnight after receiving Wall Street analysts’ vote of confidence as the company ramps up efforts to build a domestic supply chain for critical minerals, a sector gaining importance amid global geopolitical tensions.

The company struck a major deal on Monday to expand its footprint in the global critical minerals market, announcing plans to acquire Brazil-based Serra Verde Group for $2.8 billion. USA Rare Earth stock scaled a two-month high on Monday. 

Price Target Increase Signals Confidence

Roth Capital has raised its price target on USA Rare Earth shares to $30 from $25, maintaining a ‘Buy’ rating, according to TheFly. The new price target implies a 33% upside potential to the stock’s closing price on Monday. 

The firm pointed to the company’s expanding operational footprint as a key factor behind its more optimistic outlook. According to Roth, the addition of Serra Verde improves USA Rare Earth’s ability to extract and process critical minerals. The deal strengthens the company’s upstream and midstream operations, placing it as a more integrated player in the rare earth supply chain.

Serra Verde is projected to reach an annual output of approximately 6,400 metric tons of rare earth oxides once Phase 1 capacity is achieved, with the target set for late 2027. At that level, the business could generate between $550 million and $650 million in annual EBITDA (earnings before interest, taxes, depreciation, and amortization). 

USA Rare Earth stock traded over 1% higher overnight, Monday. On Stocktwits, retail sentiment around the stock turned to ‘extremely bullish’ from ‘Neutral’ territory the previous day. The stock saw a whopping 3300% surge in message volume over 24 hours. 

Wedbush’s Bullish Take On USA Rare Earth’s Growth Potential

Wedbush initiated coverage of USA Rare Earth with an ‘Outperform’ rating and set a $29 price target, implying a 28% upside potential to the stock’s closing price on Monday.

The firm emphasized its ambition to establish a fully domestic pipeline, spanning from raw material extraction to finished magnet production. The company’s flagship Round Top site in West Texas stands out as a major asset, described as the largest deposit in North America focused on heavy rare earth elements.

Wedbush also pointed to USA Rare Earth’s efforts to develop a commercial-scale production capability for samarium-cobalt and other key materials outside China, alongside a magnet manufacturing plant in Stillwater, Oklahoma, which has already begun shipping neodymium-iron-boron magnets this quarter.

The firm explained that tightening export restrictions from China has heightened awareness of supply chain vulnerabilities. Wedbush noted that reliance on foreign sources is becoming increasingly costly, creating an opening for U.S.-based producers to secure long-term contracts across multiple stages of the rare earth ecosystem.

USAR stock has gained over 89% year-to-date. 

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