Massive Value Unlock Imminent: Goldman Sachs Bullish on MP Materials Stock

Goldman Sachs just dropped a bombshell prediction that could reshape commodity investing.

The Hidden Treasure

MP Materials sits on what analysts are calling a 'digital gold mine' - rare earth elements crucial for everything from electric vehicles to defense technology. The timing couldn't be more perfect as global supply chains scramble for alternatives to Chinese dominance.

Unlocking the Vault

Production ramp-ups and new processing facilities are about to unleash what Goldman describes as 'significant value' - Wall Street code for 'get in before everyone else does.' The stock's been consolidating for months, building energy like a coiled spring.

Smart Money Moves

Institutional investors are quietly accumulating positions, recognizing that in today's digital economy, the picks and shovels often outperform the gold miners themselves. Another case of traditional finance finally catching up to what crypto natives understood years ago - real value often hides in plain sight.

TipRanks Black Friday Sale

• Claim 60% off TipRanks Premium for the data-backed insights and research tools you need to invest with confidence.
• Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off

9% of those gains were added in Wednesday’s session after the company announced a deal with the U.S. Department of Defense and Saudi Arabia’s mining company, Maaden, to build a rare-earth refinery in the country. MP and the Pentagon will jointly hold 49% of the venture, while Maaden will own at least 51%. The Defense Department will fund the U.S. share, and MP will contribute its technical and marketing expertise.

Recall, in July, the Pentagon and MP signed a significant agreement that includes an equity stake, a price floor, and an offtake arrangement. The investment in MP is part of the TRUMP administration’s push to cut U.S. reliance on Chinese rare-earth imports and build a domestic supply chain.

MP is the largest rare-earth producer in the Western Hemisphere, primarily focusing on neodymium-praseodymium (NdPr) oxide. This material is essential for producing permanent (NdFeB) magnets used in electronics, electric vehicles, defense systems, and other applications that are vital to major components of U.S. manufacturing.

Goldman Sachs analyst Brian Lee thinks the company is poised to control over 90% of North America’s NdPr production. This makes MP uniquely positioned to capture market share from China-based producers and refiners as domestic manufacturers seek to diversify their supply chains. The company has offtake agreements with GM for magnets and with Apple to expand recycling capabilities alongside magnet production. Moreover, the strategic partnership with the U.S. Department of War supports accelerated growth in downstream magnet production, while NdPr sales through power purchase agreements (PPAs) ensure a minimum price, mitigating commodity risk. “As a result,” says Lee, “we expect the accelerated vertical integration to drive meaningful profitability and sales growth into the end of the decade.”

The company anticipates that its mine-to-magnet approach will “unlock significant value” as it anticipates to lower input costs for its magnet facilities. Furthermore, MP highlighted that 70% of its targeted magnet capacity already has guaranteed offtakes from the Department of War, with potential upside if sales are redirected to third-party customers.

Additionally, Lee thinks recycling is set to be a “strategic flywheel,” accelerated via its partnership with Apple. Lee believes the company plans to develop a recycling facility to support Apple’s magnet production. Once current expansion plans are completed, MP could potentially scale up the recycling operation, using magnet waste as its own feedstock. Over time, this approach could result in a “value creating flywheel.”

All that is to say Lee initiated coverage of MP stock with a Buy rating and $77 price target, suggesting the shares will post gains of 21% over the next year. (To watch Lee’s track record, click here)

Most of Lee’s colleagues take a similar stance; based on a mix of 11 Buys vs. 3 Holds, the analyst consensus rates the stock a Strong Buy. The forecast calls for 12-month returns of 28%, considering the average target clocks in at $81.19. (See MP stock forecast)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.