Wall Street Strategist Backs MP Materials as Rare Earth Sector Gains Clarity

MP Materials US5533681012

Shares of rare earth producer MP Materials held steady at $60 on Friday, December 12, 2025. The stability comes amid a mix of high-profile analyst endorsement and significant insider selling activity, presenting investors with a complex picture.

Fundstrat's lead analyst, Tom Lee, has placed the company on his top picks list for 2026. He groups MP Materials with industrial giants Eaton and GE Vernova, identifying them as primary beneficiaries of the ongoing artificial intelligence and infrastructure investment wave. Lee's broader market outlook suggests the S&P 500 could climb to 7,700 points by the end of 2026, fueled by a continued accommodative monetary policy from the Federal Reserve. In such an environment, he expects materials equities like MP to outperform.

Counterbalancing this bullish call are substantial sales by company executives. On December 5, CEO James Litinsky disposed of 385,000 shares, a transaction valued at approximately $24.2 million. This was followed by CFO Ryan Corbett's sale of 38,146 shares for about $2.29 million on December 9.

These moves have introduced a note of caution, prompting some market participants to question whether management believes the stock has reached a near-term valuation peak. This scrutiny persists despite the equity's impressive 275% gain throughout 2025.

A Transparent Pricing Mechanism Emerges

A pivotal shift occurred in the rare earth market this week, potentially strengthening MP Materials' fundamental case. For the first time, Argus Media launched seven U.S. delivered prices for rare earth oxides. This new pricing system includes the industrially crucial neodymium-praseodymium (NdPr) oxide.

This development ends decades of market opacity, a condition long sustained by China's dominance in the sector. For MP Materials, the transparent benchmarks could help justify the premium it commands for its domestically produced materials. Further price support is provided by a government-guaranteed NdPr floor price of $110 per kilogram, a policy designed specifically to counter Chinese price manipulation.

Strategic Pivot Yields Concrete Partnerships

The current investor interest is rooted in a successful strategic repositioning undertaken by the company this year. MP Materials has evolved from a pure-play mining operator into a strategic manufacturing partner for the West, a transition marked by several key deals:

• Apple Partnership: A $500 million supply agreement for magnets, which included a $200 million upfront prepayment.
• U.S. Department of Defense: A $400 million investment, supplemented by a $150 million loan featuring a price guarantee.
• Saudi Arabian Joint Venture: A partnership with Ma'aden to construct a refining facility, in which MP Materials holds a 49% stake.

The company reported a net loss in the third quarter; however, it also achieved record production volumes of NdPr oxide. Management has guided that it expects to reach profitability for the first time in the current fourth quarter.

Next Phase: Heavy Rare Earths Independence

Looking ahead to 2026, the operational focus will shift to bringing a heavy rare earth separation facility online. This plant is designed to process dysprosium and terbium, elements critical for high-performance magnets used in electric vehicles and defense applications.

Its launch would further insulate MP Materials from Chinese export restrictions, which were tightened in April 2025. Analysts at Morgan Stanley and Goldman Sachs have reiterated positive ratings on the stock, emphasizing its "strategic importance to national security."

The average Wall Street price target for MP Materials stands at $78.91, implying an upside potential of roughly 31% from current levels. From a technical perspective, the share price is consolidating following its substantial rally, with the $60 level now acting as a key support zone.