Shares of MP Materials (MP, Financial) have declined by 12%, or $3.14, bringing the stock price to $23.21 during midday trading. This drop follows the company's decision to suspend shipments of rare earth concentrate to China after the implementation of a 125% retaliatory tariff.
JPMorgan analysts highlight that this disruption is likely to have significant short-term financial impacts. The company has relied heavily on rare earth concentrate sales, which comprised 70% of its segment revenue last year and were the main contributor to its profitability. The firm is in the process of advancing its midstream and downstream operations, which have not yet reached profitability.
Despite the current challenges, MP Materials is positioned to accelerate its strategy to emerge as a leading player in the Western market for rare earth elements, according to JPMorgan. The cessation of Chinese shipments, while impacting immediate revenues, may expedite the company’s long-term objectives in this regard.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 10 analysts, the average target price for MP Materials Corp (MP, Financial) is $27.16 with a high estimate of $32.00 and a low estimate of $21.60. The average target implies an upside of 16.92% from the current price of $23.23. More detailed estimate data can be found on the MP Materials Corp (MP) Forecast page.
Based on the consensus recommendation from 12 brokerage firms, MP Materials Corp's (MP, Financial) average brokerage recommendation is currently 1.9, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for MP Materials Corp (MP, Financial) in one year is $29.28, suggesting a upside of 26.05% from the current price of $23.2296. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the MP Materials Corp (MP) Summary page.
