MP stock surged nearly 40% in premarket trading on Thursday after the company announced a major deal with the US Department of Defense.
The rally in MP Materials share came as the agreement with the Pentagon aims to rebuild America’s rare earth magnet supply chain, marking a big step toward cutting dependence on foreign sources.
Backed by $750 million in investment and a $150 million loan from the Pentagon, the agreements will help fund a cutting-edge magnet manufacturing facility in the US, known as the “10X Facility.”
Slated to begin operations in 2028, the plant is expected to significantly ramp up MP Materials’ domestic production capacity, reaching around 10,000 metric tons of rare earth magnets per year.
Alongside the Pentagon’s backing, MP Materials has locked in a $1 billion financing commitment from JPMorgan Chase and Goldman Sachs to help fund the construction and development of the new facility.
The company also plans to grow its heavy rare earth separation capabilities at its Mountain Pass site in California, a move that further strengthens its position as a key player in America’s critical minerals strategy.
Strategic importance for US security
Rare earth magnets play a vital role in a wide range of advanced technologies, from military systems like missile guidance, fighter jets, and naval ships to everyday commercial products such as electric vehicles, wind turbines, and robotics.
Yet despite their importance, the US has remained heavily reliant on foreign sources, especially China, to meet its needs.
One of the key elements of the deal is a 10-year price floor set by the Department of Defense, ensuring MP Materials will receive at least $110 per kilogram for its neodymium-praseodymium (NdPr) products.
The arrangement is meant to protect the company from market distortions, provide stable cash flow, and help spur continued investment in building out a reliable domestic supply chain.
MP stock: What analysts say
Analysts see MP Materials’ latest deals with the Department of Defense as a significant strategic victory, further cementing the company’s role in revitalizing the US rare earth supply chain.
With demand for rare earth magnets projected to grow at a 12% annual pace through 2030 thanks largely to the rise of electric vehicles and renewable energy, MP Materials is in a strong position to capitalize.
Its vertically integrated model, covering everything from mining to magnet production, gives it a clear edge.
Morgan Stanley recently raised its price target on the MP stock to $34, up from around $28, citing MP’s potential to meet as much as 40% of US rare earth demand by 2027.
As per Marketbeat, MP stock currently holds a consensus rating of “Moderate Buy” or “Buy,” depending on the source, with most analysts expecting the stock to perform well though some are urging caution following its recent price jump.
Out of 9 to 13 analysts tracked, 5 rate the stock a “Buy” and 4 recommend “Hold.” No analysts have issued a “Sell” rating.
Price targets vary, with 12-month estimates ranging from $26.38 to $29.90 on average. The most optimistic forecast puts the stock at $38, while the most conservative sits at $12.50.
The median target comes in around $30, suggesting a modest upside from current levels.
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