Bank of America has upgraded its outlook on MP Materials, labeling it an “unmatched vehicle” for investing in rare earth elements, especially following the company’s recent strategic partnership with the Defense Department. The revised earnings estimates come as the bank raises its price target for MP shares to $78, which reflects a potential upside of around 14% from Tuesday’s closing price of $68.39. This is a significant increase from the previous target of $42.
The catalyst for this optimistic outlook stems from the Pentagon’s commitment to invest $400 million in MP Materials, which includes setting a price floor for rare earth elements and securing future supply agreements. This deal, announced on July 10, has been pivotal, leading to MP shares more than doubling in value. Additionally, Apple’s decision to invest $500 million in enhancing MP’s production capacity further supports the company’s growth potential.
Analyst Lawson Winder emphasized the long-term stability that the Defense Department partnership offers, indicating that MP’s earnings could considerably benefit from the anticipated rise in U.S. pricing for neodymium-praseodymium (NdPr) oxide—the key component for rare earth magnets—expected to increase by 33%. Consequently, Bank of America now forecasts an adjusted loss per share of 5 cents for MP this year, a notable improvement from the previous expectation of a 17-cent loss. The outlook for 2026 also appears brighter, with an anticipated adjusted profit of $1.03 per share, an increase from the earlier projection of 54 cents.
This positive forward momentum reflects the growing demand for rare earth magnets, and Bank of America’s reassessment underscores the significance of MP Materials as a leading player in the sector. With the backing from major investments and government partnerships, the future looks promising for MP and its stakeholders.