MP - MP Materials downgraded at Northland as NdPr prices nosedive

2023-04-18 10:14:42 ET

MP Materials ( NYSE: MP ) -4.3% in Tuesday's trading as Northland Capital downgraded the stock to Market Perform from Outperform with a $32 price target, cut from $48, saying falling NdPr prices bode ill for the company's revenues.

Prices for neodymium and praseodymium - the strongest types of rare earth magnets - have suffered a 30% hit since January in the wake of a slow and messy opening of the Chinese economy, a financial setback from regional bank failures, and recession fears, Northland's Abhishek Sinha wrote.

The analyst said Wall Street estimates need to be revised down in response, and warned MP Materials ( MP ) shares could be range bound without more clarity on NdPr price movement.

Uncertainty around U.S.-China trade policy could put a lid on NdPr prices "for some time," Sinha said, adding "it is getting incredibly hard to be bullish on materials that are highly dependent on China."

MP Materials ( MP ) shares have plunged 25% since March 1, when Tesla said it would not use rare earth minerals in its next-generation motor .

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