MW The last holdout on MP Materials' stock has turned bullish

By Tomi Kilgore

U.S.-China trade tensions have been subdued, but rare-earth supply remains a problem - and Morgan Stanley believes MP Materials can help fix it

Wall Street analysts are now unanimous in being bullish on MP Materials' stock, after Morgan Stanley's Carlos De Alba upgraded it to overweight.

And then there were none: After Morgan Stanley's Carlos De Alba upgraded MP Materials' stock on Friday, all analysts covering the rare-earth materials producer are now bullish.

Following the stock's (MP) rip-roaring rise that started over the summer - kicked off by the company's announcement of a deal that would make the U.S. government its largest shareholder - MP shares have pulled back sharply over the past couple months, after the Trump administration and China reached an agreement that would allow America companies access to rare-earth materials produced in China.

But De Alba noted that the agreement isn't permanent nor guaranteed, and he doesn't believe it solves America's rare-earth dependency issues. He thinks MP Materials will benefit as the U.S. and other countries continue to develop supply chains that bypass China.

"Geopolitical tensions, although temporarily subdued, continue to raise doubts about the supply of these critical components and elevate MP's strategic value," De Alba wrote in a note to clients, citing the company's deal with the U.S. Department of Defense, as well as its deal with Saudi Arabia's flagship miner announced in November.

He said China's export-license program for rare-earth elements and the permanent magnets they are used to make remains "cumbersome" and can take a long time to navigate, as companies need to provided detailed information on the products they will be used for.

"The unprecedented deal signed between MP Materials and the DoD earlier this year was in large part a result of the company's vertical-integration strategy to go all the way from mine to magnet production, making the company the only fully integrated supplier of permanent magnets globally," he wrote.

De Alba raised his rating on the stock to overweight from equal weight. That means that all 17 analysts surveyed by FactSet who cover MP shares now recommend that investors buy.

The stock rose 2% in afternoon trading Friday. Although it has rallied 21.3% since it closed at a four-month low on Nov. 6, it has still lost 36.1% since it closed at a record $98.65 on Oct. 14.

De Alba certainly isn't the most bullish analyst, as his $71 price target on MP is well below the highest analyst target, which is Jefferies's Laurence Alexander's $90 target, and below the average target of $79. But it still implies about 13% upside from current levels.

Among shares of other rare-earth companies, those of USA Rare Earth (USAR) were up 0.1% in recent trading, while Trilogy Metals' stock $(TMQ)$ edged up 0.5%.

De Alba wasn't always neutral on MP Materials' stock. About a month before the stock's big surge started in mid-July - it had more than tripled in three months to a record close of $98.65 on Oct. 14 - De Alba turned bullish on MP, on the idea that rising geopolitical tensions could elevate the company's strategic value for the U.S. and investors. Then in late July, after the DoD deal was announced, he turned neutral.

-Tomi Kilgore

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December 05, 2025 15:25 ET (20:25 GMT)

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