The Metals Company upgraded as US bolsters domestic critical mineral supply

Wedbush upgraded The Metals Company (TMC) to 'Outperform' and raised its price target to $11 from $6, driving shares up 14.5%. This upgrade stems from a new US Executive Order bolstering domestic critical mineral supply, which analysts believe positions TMC as a primary beneficiary. TMC's first-mover advantage in deep-sea mining, coupled with the order's potential to expedite regulatory approvals by bypassing UN-backed frameworks, is seen as crucial for reducing US reliance on China for rare earth metals and establishing a vertically integrated, US-based supply chain for high-tech industries.

Analysis

The Metals Company (TMC) has received a significant endorsement from Wedbush, which upgraded the stock to 'Outperform' and increased its price target to $11 from $6, precipitating a 14.5% rise in its share price to approximately $7.60. This bullish revision is directly attributed to a US Executive Order aimed at securing a domestic supply of critical minerals, positioning TMC as a primary beneficiary. Analysts highlight that this new regulatory pathway may allow TMC to bypass the historically challenging UN-backed International Seabed Authority (ISA) framework, a major overhang that previously constrained the company's valuation. This development could substantially accelerate the timeline for commercial production in the Clarion Clipperton Zone. The strategic importance of this move is amplified by the ongoing US-China trade tensions, as the US seeks to reduce its dependency on China for rare earth metals, which account for over 80% of its imports and are vital for high-tech and defense industries. The analysis also suggests a broader ecosystem play, identifying potential partners like MP Materials and Perpetua Resources in the effort to build a vertically integrated, US-based supply chain.

Key Decisions for Investors

• Investors should view the regulatory shift from the US Executive Order as a significant de-risking event for The Metals Company, potentially accelerating its timeline to commercial production and validating the new $11 price target.
• It is crucial to monitor the tangible outcomes of the Executive Order, specifically the creation of a domestic permitting process, as this is the core catalyst underpinning the bullish thesis.
• Consider evaluating other potential beneficiaries in the domestic critical minerals space, such as MP Materials and Perpetua Resources, as the US initiative to build a vertically integrated supply chain could create a sector-wide tailwind.
• Recognize that the investment thesis is heavily tied to geopolitical tensions with China; any significant improvement in relations could temper the strategic urgency and government support for this initiative.