Goldman Sachs says buy this rare earths miner that's already soaring in 2025

Goldman Sachs initiated coverage of rare-earth miner MP Materials with a Buy rating and a $77 12-month price target—about 32% above Tuesday’s close—after the stock surged roughly 275% year-to-date. Analyst Brian Lee highlighted MP’s position as the largest rare-earth producer in the Western Hemisphere and its focus on neodymium‑praseodymium oxide (key for magnets), noting that a U.S. Department of Defense agreement guarantees a $110/kg price floor for NdPr for 10 years while allowing upside participation, which derisks commodity earnings. GS expects MP’s downstream expansion into refining and magnet production, plus a planned magnet-recycling facility (including support for Apple), to drive significant revenue and EBITDA growth and unlock margin upside as the company helps build a Western alternative to China’s 90–95% dominance in rare-earth refining.

Analysis

Goldman Sachs initiated coverage of MP Materials with a Buy rating and a $77 12-month price target, implying roughly 32% upside from Tuesday's close, after the stock has surged approximately 275% year-to-date. The initiation explicitly ties the valuation to MP's market position and recent share-price momentum.

Analyst Brian Lee highlights MP as the largest rare-earth producer in the Western Hemisphere with a specialty in neodymium-praseodymium (NdPr) oxide, a critical input for magnets used in electronics, and emphasizes MP's downstream expansion into refining and magnet production. Lee cites a strategic partnership with the U.S. government as accelerating that expansion and positioning MP within a supply chain where China controls 90-95% of refining (EIA, 2024).

The Department of Defense agreement guarantees a $110/kg price floor for NdPr for the next 10 years while allowing MP to share upside above the floor, which GS views as derisking commodity-related earnings volatility. GS expects significant revenue and EBITDA growth and margin expansion via vertical integration.

MP's planned recycling facility to support magnet production for Apple is described as an incremental value-creating flywheel, but the investment case depends on execution of downstream ramps, continued government support, and realization of margin capture despite the stock's prior 275% YTD run.

Key Decisions for Investors

• Consider a selective buy or add-on to positions on disciplined pullbacks given GS's $77 target and the DoD-backed $110/kg 10-year price floor, but size exposure conservatively given the 275% YTD rally
• Monitor concrete execution milestones — refining and magnet-production ramp schedules, recycling-facility agreements (including Apple), and early EBITDA read-throughs — before increasing conviction
• Implement downside protection or staged position sizing to guard against execution or policy risks despite the derisking effect of the DoD floor, and reassess if government terms or market-share dynamics with China change