Back to top

Image: Bigstock

MP Materials (MP) Soars 10.1%: Is Further Upside Left in the Stock?

Read MoreHide Full Article

MP Materials Corp. (MP - Free Report) shares soared 10.1% in the last trading session to close at $24.47. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 8.7% gain over the past four weeks.

On Jan. 22, MP Materials announced that its facility in Fort Worth, TX, started commercial production of neodymium-praseodymium (NdPr) metal and also commenced trial production of automotive-grade, sintered neodymium-iron-boron (NdFeB) magnets. Notably, it is America’s first fully integrated rare earth metal, alloy, and magnet manufacturing facility. This marks a major step in restoring the U.S. rare earth magnet supply chain. 

China continues to dominate the rare earth market. The Trump administration aims to reduce the reliance on Chinese rare earth imports by encouraging domestic production and partnering with allied nations. President Trump’s imposition of 10% tariff on China imports could potentially drive U.S. rare earth prices in the long term. Additionally, the President has expressed interest in securing rare earth supply from Ukraine in exchange for financial support.

This company is expected to post quarterly loss of $0.12 per share in its upcoming report, which represents a year-over-year change of -500%. Revenues are expected to be $50.58 million, up 22.7% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For MP Materials, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on MP going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

MP Materials is a member of the Zacks Mining - Miscellaneous industry. One other stock in the same industry, Cleveland-Cliffs (CLF - Free Report) , finished the last trading session 8% higher at $10.52. CLF has returned -1.6% over the past month.

Cleveland-Cliffs' consensus EPS estimate for the upcoming report has changed -6.7% over the past month to -$0.54. Compared to the company's year-ago EPS, this represents a change of -980%. Cleveland-Cliffs currently boasts a Zacks Rank of #3 (Hold).


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Cleveland-Cliffs Inc. (CLF) - free report >>

MP Materials Corp. (MP) - free report >>

Published in