MP Materials is trying to reclaim a buy point Friday after topping fourth-quarter earnings estimates and getting a couple of price-target boosts. The U.S. producer of rare earth minerals says it's on track to manufacture automotive-grade magnets at scale for General Motors by the end of 2025.
That will cap off MP Materials' multistage expansion plan it eyed when it held an initial public offering in 2020. MP, short for its Mountain Pass, Calif., mining complex, began to separate the rare earths it mines in 2022, having previously shipped all of its unseparated product to China.
MP Earnings
Revenue grew 48% to $60.98 million, well ahead of $50.71 million estimates. MP posted an adjusted Q4 loss of 12 cents a share vs. a year-ago 2-cent loss. That was a penny better than estimates.
Rare earth oxide volume jumped 24% from a year ago, while realized prices per metric ton fell 16%.
The wider loss came as cost of sales jumped to $58.3 million from $23.6 million, which MP attributed to "elevated production costs" as it ramps up output.
Magnet Milestone
Over the past few years, MP has been building a rare earth magnet manufacturing facility in Austin, Texas, with support from GM, its foundational customer. Last month, MP announced it had begun commercial production of NdPr metal, calling it a "pivotal milestone in restoring the U.S. rare earth magnet supply chain."
MP has already begun trial production of automotive-grade, sintered neodymium-iron-boron (NdFeB) magnets at the facility and will manufacture at scale late this year, CEO Jim Litinsky said on Thursday's Q4 call.
CFO Ryan Corbett said on the Q4 call that MP now believes its Independence facility in Fort Worth "can more than double our initial target capacity with significantly lower incremental capital."
Litinsky cited an Atmos Research finding that demand for NdFeB magnets will triple by 2040, fueled by electrification and artificial intelligence, specifically physical AI.
Rare earth magnets are used in many electric motors, explaining GM's partnership with MP. However, once it executes its commitment to GM, MP has "no shortage of opportunities," Corbett said, to provide a secure source of NdFeB magnets for robotics, drones, eVTOL aircraft, defense tech and other emerging markets.
MP Analyst Upgrades
BofA lifted its price target for MP stock to 26 from 22, keeping a buy rating, highlighting MP's outlook for over 20% sequential production growth in neodymium-praseodymium (NdPr) oxide.
Baird raised its MP price target to 30 from 25, keeping an outperform rating.
MP Stock
MP jumped as high as 24.70, reclaiming a 24.01 buy point from a cup base. After easing off its highs, MP is up 4.2% at 24.16. Friday's move lifted MP clear of the 21-day exponential moving average as it tries to break the recent downtrend after a prior breakout attempt faltered.
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