How do we value MP Materials given all the recent news?

John

Administrator
Staff member
So given all the recent annoucements...has anyone updated their valuation models for MP?

I did one about 3-4 years ago...and given they were only selling MREC to china....i didn't progress it far. But i had a NPV of about $3-4 billion which i think equated to a SP of about $20-25. i bought some at about $15.

I see some analysts have been talking about revenue doubling by 2027...“Baird analyst Ben Kallo now projects 2027 earnings before interest, taxes, depreciation, and amortization, or EBITDA, of $554 million. The Wall Street consensus…was closer to $200 million just a few days ago.

So if we believe that (which i don't)....lets assume that doubles the Market Cap/NPV.....so $6-8 billion....so a SP of a bout $40-50

Current Market cap is $9-10 billion....with a SP of about $60....

So IMHO...MP is currently overpriced by the market.....BUT....what else do they have in the pipeline with Trump........

Some thoughts:
- JV with Arafura in Australia?
- More magnet supply contracts with big USA OEM?
-


Anyone got any thoughts on MP?
 
Also...have a close read of our article which goes into the deal in detail:
https://rareearthexchanges.com/news...ked-deal-the-good-potential-issues-and-risks/

Sure...it sounds great for MP...but they are giving away alot of the upside to the DoD. And alot of their product will be DoD specific...so will they be able to sell the rest at high prices?

So while it has ensured MP's survival...and will provide USA and especially the DoD it's rare earth independance.....does the SP hype justify the actual returns that MP will recieve....PLUS....all the exectution risk in delivering all these new products (NdPr oxides, same for the HREE and magnets).....

And throw into that the Apple recyling projects....


DOES MP HAVE THE MANAGEMENT TO DELIVER ON ALL THIS?
 
Anyone got any thoughts on MP?
Yes.

What are the economics on this next push-back of the current open-cut?

Their last one was at a strip ratio of >8:1 and they are still not in profit, at today's prices,

OK an extra US$50/kg for their NdPr is going to help a lot. But coming off a break-even base; at 2,500tpa NdPr they might now make US$125 million profit. Which would give them an EPS of around US$1.00 per share. Toss in a very generous PE of 30:1 and it would suggest that their current SP is still perhaps a tad speculative?
 
They have the guys at JP Morgan and Goldmansachs financing them now. So I bet they also having them recommend MP to their clients as well.
 
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