MP Materials (MP)

Dec 10, 2021Trade Ideas

MP Materials (MP) could see higher highs.

All as it inks a strategic rare earth supply deal with General Motors. After all, according to Investor’s Business Daily, “Neodymium-iron-boron (NdFeB) magnets are essential for EV motors. The magnets also are critical inputs for drones, defense systems, wind turbines, robotics and many other advanced technologies. However, there is virtually no domestic capacity to produce NdFeB magnets today.”

With MP Materials’ help, it’s possible we can significantly reduce our dependence on China for rare earth. As we’re unfortunately aware, that arrangement isn’t reliable, nor is it safe — forcing us to look elsewhere. Making the situation far worse, China has threatened to withhold rare earth, well aware that if they choke supply, they rattle markets.

With a deal in place with General Motors, we wouldn’t be shocked to see other automakers making similar deals down the road. Even better, Bank of America just initiated coverage of MP Materials with a buy rating and a $52 price target.

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