Great article, would you like to share it?
$MP Reclaims $100 Level in 2026. Yes !
@JC888：
As the curtains draw on a historic 2025, $MP Materials Corp.(MP)$ (in my humble opinion) stands as the centerpiece of a high-stakes geopolitical drama. After a year defined by a staggering +228.8% surge in share price, the company is not merely resting on its laurels. Instead, MP is preparing for a "Phase II" breakout in 2026, fueled by the commissioning of the West’s first heavy rare earth facility and a unique $1.1 billion government-backed pricing safety net. Before we look at MP materials in 2025 retrospectively, below are posts I have shared previously - Enjoy ! 14 Jul 2025 - AAPL pushed $MP to $62 Intraday. OMG! 11 Jul 2025 - MP +50% Surge - Peak or just Starting ? 2025 - A Year of Volatility & Verticality in Retrospect. MP’s 2025 trading year was a masterclass in "strategic re-rating". The stock's performance was dictated by a shift from commodity-based valuation to a premium "security-of-supply" valuation. The Stock Price Arc The Nadir: Shares began 2025 near a 52-week low of $15.56, a level that many value investors identified as the cyclical bottom. The July Surge: On 10 Jul 2025, following the announcement of the Department of Defense (DoD) partnership, the stock leapt by approximately +50% in a single session, reaching levels not seen since 05 Apr 2022 (intraday high of $60.19). On 14 Oct 2025, the stock reached an all-time high of $100.25. This was an +83.8% increase over the current trading price of approximately $54.54 (as of 24 Dec 2025). Since its October 2025 peak, the stock has undergone a significant correction of over -41%, currently finding support in the $52 – $62 range. Market Valuation & Capitalization As of 24 Dec 2025, MP Materials boasts a market capitalization of $9.67 billion. Over the last 12 months, market cap has surged by +223.87%, growing from $2.55 billion (end 2024) to its current valuation. DoD Partnership: Structural De-risking MP’s defining moment in 2025 was the transformational public-private partnership with the US Department of Defense (DoD), that fundamentally altered MP's risk profile. 1. The Equity Stake On 11 Jul 2025, the DoD closed a $400 million investment in newly issued convertible preferred shares and warrants. This established the DoD as MP's single largest shareholder, holding a 15% stake on an as-converted basis. Initial conversion and exercise price was set at $30.03 per share. 2. The $110/kg Price Floor Starting from 01 Oct 2025, MP’s newly minted stakeholder, the DoD, also entered into a 10-year agreement establishing a price floor of $110 per kilogram for MP’s Neodymium-Praseodymium (NdPr) products. This “safety net” mechanism flooring ensures consistent economics regardless of Chinese overproduction or predatory pricing tactics. The agreement also included a "shared upside" clause, where the DoD participates in profits if market prices rise significantly above the $110 threshold. 3. Infrastructure Financing Backed by a $1 billion commitment from two of US large banks - $JPMorgan Chase(JPM)$ and $Goldman Sachs(GS)$ , MP is constructing the "10X Facility" to produce 10,000 metric tons of high-performance magnets annually. The DoD has made a ‘guaranteed offtake’ to MP, to purchase 100% of magnet output from the 10X Facility for a period of 10 years following its completion (estimated to go into production in 2028). Lastly, an additional $150 million loan from the DoD was pledged to fund upgrades to MP’s existing Mountain Pass separation facility. Technical Analysis & Market Dynamics. Consolidation before the 2026 rise. As of late December 2025, MP’s technical indicators reflect a stock that has washed out its speculative froth and is finding a new baseline - a "consolidation-and-digest" phase, I like to term it. Moving Averages: 20-Day MA: At $57.54, this average is currently trending above the stock's price of $54.58. This indicates negative short-term momentum, as the stock has struggled to stay above its recent monthly average. 50-Day MA: Situated at $62.46, this indicator is also above the current price. This confirms that the stock is in a "corrective" phase, having dropped significantly from its recent highs and breaking through key support levels like $62.00. 200-Day MA: At $48.73, this is the only major moving average currently below the stock price. This provides a critical "safety net" and indicates that, despite recent volatility, the primary long-term uptrend remains structurally intact. Relative Strength Index (RSI) The 14-day RSI stands at approximately 42.68 (see above), indicating that the stock is currently in a neutral to slightly weak range and is neither overbought nor oversold as it consolidates following its recent correction. Trading Volume. On 24 Dec 2025, trading volume was approximately 2.36 million shares, a sharp contrast to its 30-day average of 13.37 million shares. In the broader context of 2025, a year where MP has surged by +250%, Wednesday low-volume suggests the market is currently in a "wait-and-see" mode as it consolidates recent gains and looks toward the next major earnings catalyst in February 2026. Price-to-Earnings (P/E) Ratio. As of 24 Dec 2025, MP’s P/E ratio is -76.82 (see above). This as the company continues to invest heavily in infrastructure. This represents a increase of +31.71% compared to its 12-month average P/E ratio of -58.97. A higher P/E ratio suggests that investors expect strong future earnings growth, while a lower P/E ratio may indicate a potentially undervalued stock or slowing growth. Chart Formation. MP Materials is currently exhibiting a classic "Cup and Handle" formation on the 2025 chart, transitioning from an aggressive vertical rally into a healthy base-building phase. The Surge (Jan–Oct): A parabolic run from $16 to a peak of $100.25, driven by the "mine-to-magnet" manufacturing pivot. The Correction (Oct–Nov): A sharp 50% retracement to the $50–$60 range, effectively cooling off extreme overbought conditions. The Consolidation (Dec): Sideways movement establishing firm support near $53, coiling for a potential 2026 breakout above the $65 resistance. China Catalyst: Export Restrictions as a Price Driver A primary catalyst for the projected 2026 resurgence lies in the persistent supply chain friction originating from China. (see below) China’s Strategic Licensing Slowdown: Market participants has reported that China is still restricting the rare earth elements needed for US magnet production, despite high-level diplomatic "truces". While deliveries of finished products have increased, US industry remains unable to acquire the raw inputs needed for independent production. Specifically, China has been approving only about 25% of export license applications since April 2025. The intentional slowing of permits creates a backlog and "skittishness" in the industry, effectively acting as an unofficial export control that hamstrings US domestic capacity efforts. For MP Materials, this bottleneck is a massive long-term catalyst, as it forces Western manufacturers to accelerate their transition to MP’s domestic supply chain, regardless of short-term price fluctuations. Operational Segment : "Mine-to-Magnet" Pivot As Warren Buffett often says, an investor should only buy a stock if he / she truly understand how the business works first. Because of this, I am going to sidetrack and provide a quick (latest) summary of what MP Materials actually does. I really believe this information will be very useful for anyone thinking about putting their money into the company. MP Materials operates two synergistic segments that are currently undergoing a massive strategic transformation. (1) Materials Segment (Mountain Pass) This business segment owns and operates the Mountain Pass facility in California. Its primary role is to (a) extract raw ore and (b) process it into rare earth oxides (specifically Neodymium-Praseodymium (NdPr)). The China Embargo: Since July 2025, MP made the strategic decision to cease all rare earth concentrate sales to China. This concentrate business had generated $43.1 million in revenue in Q3 2024 but was discontinued to prioritize internal refining. Q3 2025 marked the 3rd consecutive quarter of record production for MP, with 721 metric tons of NdPr oxide, that’s a +51% YoY output increase. Although costs averaged is still above the $60/kg (in early 2025) due to low capacity utilization, Management has projected a drop to the low $40/kg range as production reaches normalized levels. (2) Magnetics Segment (Downstream) This segment operates the Independence Facility in Fort Worth, Texas. It takes the refined oxides from the Materials segment and transforms them into metals, alloys, and finished permanent magnets (NdFeB). These magnets are critical components for electric vehicle (EV) motors, wind turbines, and defense systems. In Q3 2025, the Magnetics segment generated $21.9 million in revenue with an adjusted EBITDA of $9.5 million. MP’s primary catalyst / driver for coming 2026 is the commissioning of the Heavy Rare Earth (HREE) separation facility at Mountain Pass, scheduled for mid-2026 operations. The facility targets to minimally process 3,000 metric ton (MT) of feedstock annually. Initially it will prioritize the production of Dysprosium (Dy) and Terbium (Tb), with a nameplate capacity of 200 MT per year. Analysts’ Sentiments. Following the recent correction, Wall Street analysts have largely reiterated or upgraded their ratings, viewing the $50 range as a generation entry point. Consensus Recommendations (Post-Nov 2025) Of the 24 analysts covering the stock, 7 strongly recommend buying and 14 recommend buying it. Below is a sampling table of the analysts’ recommendations. What is important is the average price target hovers around the $75.80 level. Based off Wed, 24 Dec 2025 closing of $54.54; there’s a potential upside of +38.98%, going into 2026. Financial Forecasts. Earnings Pivot MP is expected to report a Q4 2025 revenue of $275 million, a significant jump from the $204 million reported in Q4 2024. MP’s trailing EPS is -$0.71. For 2026, earnings are expected to grow from a projected -$0.19 per share in 2025 to +$0.32 per share in 2026. Don't be fooled - I have many poor investments too ! Summary I hope that I have provided sufficient ammunition to show that MP is no longer just a speculative play, but a stock coiled for a powerful recovery in 2026. Having weathered the volatility of 2025, the company is now entering a transformative phase where its strategic importance to the Western world finally translates into sustained financial performance. MP looks set for a structural resurgence that could redefine its valuation for years to come. Even if it is not $100 (or could be more than $100), I will take it, will you ? Due to creative differences and bias, I will scale back my posting. My 2,430 ‘timeless’ posts remain available (for now) for those who value fundamentals as Mr Buffett had pointed — invest in businesses, not pick stocks. To new subscribers, no flashy screens to entice blind investing. I aim to share on how to fish, not fish for you. I’m grateful to share what I know. In the alternate moo moo universe, where I am valued & appreciated, I will still be sharing. Good luck on your i-journey. Remember to check out my other posts. (See below). Help to Repost ok, Thanks. Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks. NBIS: Safer Haven or CRWV 2.0 ? Buy ? SRFM + PLTR: The 260% AI Surge in 2026 ! AAPL Makes INTC Great Again in 2026 ? Do you think MP materials is poised to rise higher in 2026 ? Do you think there are similar opportunities for other stocks listed in the US too ? Share ? If you find this post interesting, give it wings! ️ Repost and share the insights ? Do consider “Follow me” and get firsthand read of my daily new post. Thank you. @Daily_Discussion @TigerPM @TigerStars @Tiger_SG @TigerEvents
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Like
Report
Login to post
No comments yet