JPMorgan thinks MP Materials is set to benefit in the long term from rare earths national security concerns that are here to stay. The bank upgraded the rare earth miner to an overweight rating from neutral. It lowered its December 2026 by $1, to $74 from $75 — though that still implies a gain of 29% from Thursday’s close. Shares of MP Materials have surged 279% this year, as investors have increasingly piled into the rare earths industry after China tightened export controls on rare earth minerals and their related technologies in April as a barrage in a ramping trade war. Over the past month, however, they are down 41.7%,” which we feel offers an attractive entry point,” wrote JPMorgan analyst Bill Peterson. MP YTD mountain MP YTD chart Peterson pointed to “underappreciated national security importance” as a catalyst for the stock — specifically, MP Materials’ “landmark” deal with the Department of Defense . The Defense Department agreed in July to buy $400 million of MP’s preferred stock and also guaranteed a minimum price of $110 per kilogram for the next 10 years for neodymium-praseodymium oxide, or NdPr. The rare earth compound is a raw material for permanent magnets. “Our new rating reflects our view that rare earths national security concerns are ‘here to stay’ despite China’s reported one-year pause on export restrictions, with risks remaining, especially for military exposure,” Peterson wrote. “MP’s unique mine-to-magnet vertical integration positions the company as the ex-China leader ready to immediately begin addressing these concerns, although it will ultimately take multiple players over many years to sort out.” As a result of this deal and “largely secured” profitability floor, Peterson anticipates “limited downside risks” to Caterpillar’s stock. The analyst also applauded MP’s strong earnings visibility. “Although retail-driven volatility will likely persist in the near-term, we believe longer-term focused investors should take comfort in building a position in a government-backed company with unmatched earnings visibility where we see potential upside in the coming years,” he added.
