Electric cars, solar panels, and all sorts of green technologies require one key factor: rare earth minerals. With the word “rare” right in the name, you know they’re hard to come by. And that’s part of what gave MP Materials (NYSE:MP) a decent lift in Wednesday afternoon’s trading. China made the move just recently to cut back on rare earth minerals exportation, particularly gallium and germanium, which are used not only in computer chips but in a variety of green tech as well. With China currently the world leader in such production, that will inevitably limit the advancement of such technology in other countries. That’s where MP Materials, a non-China stock that also deals in rare earths, gets a particular boost.
MP Minerals currently boasts the only scaled rare earth production operation in the entirety of the United States. While there are locations in the United States that contain rare earth minerals, regulations, and environmental concerns often get in the way of their effective retrieval. The U.S. has actively worked to build its own rare earth supply chain, as China has held the advantage for the last 30 years or more, notes National Defense Magazine.
Is MP Materials Overvalued?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on MP stock based on five Buy ratings and two Holds assigned in the past three months, as indicated by the graphic above. Furthermore, it also boasts 36.56% upside potential thanks to its average price target of $33.43.
