Morgan Stanley upgrades this mining stock as best pick to play rare earths

The rare-earth miner MP Materials volition bask increasing strategical worth to the U.S., arsenic geopolitical tensions with China marque the proviso of captious minerals much uncertain, according to Morgan Stanley.

The concern slope upgraded MP Materials to the equivalent of a bargain standing with a banal terms people of $34 per share, implying 32% upside from Friday's close.

MP Materials owns the lone operating uncommon world excavation successful the U.S. astatine Mountain Pass, California. China dominates the planetary marketplace for uncommon world refining and processing, according to Morgan Stanley.

"Geopolitical and commercialized tensions are yet pushing captious mineral proviso chains to apical of mind," analysts led by Carlos De Alba told clients successful a Thursday note. "MP is the astir vertically integrated uncommon earths institution ex-China."

Beijing imposed export restrictions connected 7 uncommon world elements successful April successful effect to President Donald Trump's tariffs. It has kept those restrictions successful spot contempt commercialized talks with U.S.

Trump removed immoderate restrictions Wednesday connected the Defense Production Act, which could let the national authorities to connection an supra marketplace terms for uncommon earths. MP Materials is the champion positioned institution to payment from this, according to Morgan Stanley. Its shares roseate much than 5% connected Thursday.

MP Materials is processing afloat home uncommon world proviso concatenation successful the U.S. and plans to statesman commercialized accumulation of magnets utilized successful astir electrical conveyance motors, offshore upwind wind turbines, and the aboriginal marketplace for humanoid robots, according to Morgan Stanley.

The concern slope expects MP Materials to station antagonistic escaped currency travel this twelvemonth and successful 2026, but the institution has a beardown equilibrium expanse should accelerate affirmative escaped currency travel from 2027 onward.