Unanimous Analyst Consensus Emerges for MP Materials

A decisive shift in sentiment has taken hold regarding the rare earths specialist, MP Materials. The market now displays a rare degree of agreement in its assessment of the U.S. mining operator, following a pivotal Friday revision from the last remaining skeptical major research firm. This prompts a critical question: do the underlying fundamentals genuinely support such widespread optimism after the stock's recent correction?

The company's operational performance has provided a solid foundation for confidence. MP Materials recently reported a third-quarter production record of 721 tons of neodymium-praseodymium (NdPr) oxide, marking a substantial 51% year-over-year increase.

Further stability is provided by a multi-billion dollar strategic partnership with the U.S. Department of Defense (DoD). This agreement is twofold: it includes a 15% equity investment by the DoD and commits the department to purchasing specified production volumes at a guaranteed minimum price of $110 per kilogram.

Adding a long-term demand anchor, a supply contract with Apple for recycled magnets, effective from 2027, secures a significant future revenue stream.

The Catalyst: A Major Rating Upgrade

The immediate trigger for Friday's positive momentum was a reassessment by Morgan Stanley. Analyst Carlos De Alba upgraded the stock from "Equal-Weight" to "Overweight," simultaneously raising the price target from $68.50 to $71.00.

Should investors sell immediately? Or is it worth buying MP Materials?

This change in stance is largely driven by evolving geopolitical dynamics. De Alba highlighted that the United States has effectively designated MP Materials as its primary domestic solution for reshoring rare earth supply chains. This positions the firm as a crucial counterbalance to China's longstanding dominance in the sector.

This upgrade cemented a notable consensus. According to FactSet data, all 17 analysts covering the stock now recommend buying it.

Valuation Context and Market Performance

In response to the upgrade, shares experienced a modest advance on Friday, closing at $62.09. However, a broader view reveals significant volatility. While the stock has gained approximately 277% year-to-date in 2025, it currently trades between 36% and 41% below its all-time highs near $100, reached in October.

The current valuation largely reflects anticipated future growth rather than present profitability. Over the trailing twelve months, MP Materials generated revenue of about $232.74 million but recorded a net loss of roughly $117 million. Market experts, however, perceive a potential entry opportunity in the gap between the current share price and the average analyst price target of $79.00.

The Path Forward

Investor attention is now firmly fixed on execution. Key priorities include the successful implementation of the DoD partnership and the scaling of refining capabilities at the Mountain Pass mine. Analysts forecast a return to profitability, projecting earnings per share (EPS) of $0.56 for the coming fiscal year, with potential for that figure to double to $1.12 by 2027. The onus is now on management to operationally deliver on these elevated expectations.