MP Materials Corp (NYSE:MP) stock has exploded 531% from its 52-week low, with the real ignition coming in the past two months.
After months of muted trading, the stock went vertical in June and July, propelled by two major catalysts. A landmark U.S. Department of Defense agreement and a $500 million-plus rare earths recycling deal with Apple Inc (NASDAQ:AAPL).
A Turbocharged 531% Power Rally
While the 531% rally represents gain over August 2024’s 4-year low of $10.02, the bulk of investor enthusiasm has come recently – thanks to MP being chosen by both the Pentagon and Apple to play a pivotal role in the domestic rare earths supply chain.
JPMorgan analyst Bill Peterson has upgraded his price target on MP from $18 to $64, crediting the company’s new strategic positioning and improved long-term earnings visibility. But despite the surge, he maintains a Neutral rating – not because the story isn't compelling, but because he believes much of the upside is already reflected in the stock price.
JPMorgan's 7 Upside Drivers
Peterson outlines 7 key upside drivers that could fuel further gains over the longer term.
1. Additional offtake agreements
New deals with strategic partners could unlock volume visibility and justify further valuation expansion.
2. Upside to NdPr output
MP's new Apple-focused recycling line could lift output beyond current nameplate capacity.
3. Incremental feedstock sources
Recycled content from Apple, along with supply from Independence and 10X, could enhance feedstock stability.
4. Cost advantage from recycled feedstock
Cleaner, purer recycled inputs reduce processing costs compared to traditional mined material.
5. Expanded midstream capacity
The dedicated Apple line increases MP's overall midstream throughput beyond the 6Ktpa baseline.
6. Higher EBITDA floor potential
Cumulative efficiencies could push MP's $410 million EBITDA floor even higher over time.
7. Additional heavies supply for magnets
Apple's recycled content may contribute terbium and dysprosium, critical to MP's 10Ktpa magnet facility.
Long-Term Gains, Not Immediate Payoffs
These drivers are long-term levers. Peterson notes they aren't likely to materially impact profitability before 2028. Near-term gains could be potentially capped by NdPr prices being capped at around $110/kg and rising SG&A and development costs.
MP is a producer of NdPr (Neodymium-Praseodymium), which is a rare earth material, specifically a key component in high-strength permanent magnets. It is an essential raw material for industries like electric vehicles, wind turbines, and robotics.
MP's recent rally reflects strategic validation. The next phase now depends on execution, pricing tailwinds, and new commercial wins.
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