Nevada-based rare earth materials producer MP Materials Corp. (MP) has plans to build its initial rare earth (RE) metal, alloy and magnet manufacturing facility in the Texan city of Fort Worth.
The company has also signed a long-term agreement with General Motors (GM) for the supply of U.S.-sourced and manufactured rare earth materials, alloy and finished magnets.
Following the announcements, shares of MP Materials closed nearly 3% higher on Thursday. The stock rose another 4.4% in the extended trading session to end the day at $47.40.
Facility Details
The greenfield metal, alloy and neodymium-iron-boron (NdFeB) magnet manufacturing facility in Fort Worth will span 200,000 square feet and serve as the business and engineering headquarters for MP Magnetics, the company’s magnetics division.
The facility will hire over 100 skilled workers and have an initial annual production capacity of nearly 1,000 tons of finished NdFeB magnets, which can power approximately 500,000 electric vehicle (EV) motors per year.
These NdFeB magnets will power the motors of over a dozen EVs that use GM’s Ultium Platform. (See Insiders’ Hot Stocks on TipRanks)
The NdFeB magnets will also be supplied to other markets like electronic and defense technologies as well as clean energy. Further, NdFeB alloy flake from the facility will be provided to other magnet producers.
CEO Comments
The Chairman and CEO of MP Materials, James Litinsky, said, “This is a momentous occasion for the reshoring of the American supply chain, and we are grateful for GM’s confidence, commitment and leadership.”
Wall Street’s Take
After the announcements, Morgan Stanley (MS) analyst Carlos De Alba maintained a Buy rating on MP Materials and raised the price target to $51 from $38 (12.3% upside potential).
Overall, the stock has a Strong Buy consensus rating based on 4 Buys and 1 Hold. The average MP Materials price target of $50.75 implies 11.7% upside potential. Shares have gained 80.7% over the past year.
Risk Analysis
According to TipRanks’ Risk Factors tool, MP Materials is at risk mainly from two factors: Finance & Corporate and Production, which account for 34% and 24%, respectively, of the total 50 risks identified for the stock.
Under the Finance & Corporate risk category, the company has 17 risks, and under the Production category, there are 12 risks. The details of these risks can be found on the TipRanks website.
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