Apple's $500 Million Rare Earth Deal With MP Materials Pushes Deutsche Bank To Triple Price Target — Analyst Says Catalyst 'Priced In'
Deutsche Bank has raised its stock price target for MP Materials Corp. to $67 from $20 following a $500 million deal with Apple and a strategic investment from the Defense Department. This represents an 11.18% upside from its recent closing price of $60.26. Analyst Corinne Blanchard noted that the stock has priced in this catalyst, maintaining a hold rating. The U.S. aims to reduce reliance on Chinese rare earth supplies, with potential domestic supply chain solutions emerging in the next five years.
Deutsche Bank has significantly raised its stock price target for MP Materials Corp. MP following a strategic investment from the Defense Department and a substantial contract with Apple Inc. AAPL.
What Happened: Deutsche Bank has more than tripled its stock price target for MP Materials, a rare-earth miner. The company’s shares are now projected to rise to $67, a substantial increase from the previous target of $20. This new target suggests an 11.18% upside from the closing price of $60.26 per share on Thursday, as reported by CNBC.
The Pentagon’s strategic investment in MP Materials and Apple’s $500 million deal to purchase rare earth magnets from the company have significantly reduced the company’s operational risks, according to Deutsche Bank analyst Corinne Blanchard.
Blanchard stated, “The stock has now priced in the catalyst, and other potential catalysts are on the medium-term,” as she maintained the hold rating on MP.
Why It Matters: The rare earth minerals industry has been under the spotlight due to the U.S. government’s efforts to reduce its reliance on Chinese supply. This has led to a surge in the stock prices of companies in the domestic critical minerals sector, such as USA Rare Earth Inc. USAR
Trending Investment Opportunities
Despite the challenges, experts believe that the U.S. has multiple options to establish a domestic supply chain for rare earths within the next five years to replace China’s global monopoly. This includes substitutes for the seven restricted rare earths and the majority of the 17 rare earth elements and 50 critical minerals being present in the U.S.
As the U.S. faces a critical vulnerability in its supply chain concerning rare earth supply, economist Craig Shapiro asserts that this situation is fixable, and at a surprisingly manageable cost. This is evident in the recent developments at MP Materials, which have positioned the company as a strategic asset for the U.S.
Price Action: Apple closed Thursday at $210.02, slipping 0.06%, and edged up 0.10% in after-hours trading. MP Materials finished the day at $60.26, rising 2.92%, with an additional 0.56% gain after hours, according to data from Benzinga Pro.
- XRP Smashes All-Time High As Bitcoin Reclaims $119,000 And Dogecoin, Ethereum Continue Climb
Image via Shutterstock
