Rare earth minerals, and the companies that mine for them, are a critical but often overlooked industry. They include neodymium, thulium, lutetium, and are used in batteries and other cutting-edge technology. Headquartered in Las Vegas, MP Materials (MP) is the largest producer of rare earth materials in the Western world and operates the only rare earth materials mining and refining site in the U.S.
Thanks to reports that President Donald Trump is seeking to boost U.S. production of these materials, MP stock has been on the move.
Trump Signals New Metals Refining Facility Likely
According to recent reports, Trump is looking to build metals refining facilities within close proximity to American military bases in a bid to “dramatically expand production of critical minerals and rare earths here in the USA.”
Given MP’s existing footprint, investors are betting that it will be involved. An executive order is expected, in which investors are likely to receive more detail on what exactly is proposed. MP Materials shares initially rallied on the news and are up nearly 60% in the year to date.
With ongoing geopolitical turmoil between the U.S. and China, such an announcement which would make the U.S. less dependent China for refined earth materials. This could bolder the U.S. position in the event of a sharp deterioration of relations between the two nations.
This is clearly a positive catalyst for MP, but let’s dive into what the fundamentals say about whether this stock is intriguing at current levels.
Strong Growth Drives Interest in MP Stock
MP Materials is not yet profitable, analysts expect it to post earnings per share of $0.49 in 2026. Its trailing price-sales multiple is under 20x, which is much higher than the industry average near 1x but may be justified given its future growth catalysts.
And looking at the company’s income statement, it’s clear that the year-over-year growth trend on the revenue side of the ledger remains strong. MP Materials has posted revenue growth of around 50% year-over-year for the December quarter. That’s pretty darn decent for a company operating in a relatively boring industry.
However, operating income has declined as the company scales up its operations on the path to profitability. This may be a concern for some investors who are seeking out more value-oriented plays amid economic recession fears.
What Do Analysts Have to Say?
Analysts don’t currently see MP Materials having much more room to run, with the consensus price target of $25.55 implying less than 5% upside from the current level.
It’s true that MP Materials has had a nice run in recent weeks, and it’s likely also true that analysts will eventually catch up with their ratings issue higher price targets for shares. The stock has a consensus rating of “Moderate Buy” reflecting cautious optimism.
Personally, I’ve been bullish the rare earth materials market for a long time, but the industry appears to still be flying under the radar. It is unclear how much Trump’s plans for metal refining facilities will directly lift MP, but regardless, I am bullish on MP’s prospects over the long term.
