With Surging Domestic Chinese Rare Earth Prices, JPMorgan Again Raises Molycorp (MCP) Price Target
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Price: $0.36 --0%
Rating Summary:
2 Buy, 6 Hold, 2 Sell
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Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
Rating Summary:
2 Buy, 6 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
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JPMorgan raised its price target on Overweight Molycorp (NYSE: MCP) for the second time in as many weeks as domestic Chinese rare earth prices continue to climb higher.
Analyst Michael F. Gambardella lifted his price target on the U.S.-based rare earth miner from $74 to $90 and reiterated his Overweight rating.
We feel comfortable with these higher numbers given the continued increase in domestic Chinese prices," Gambardella said. "We believe rare earth prices will not fall as significantly as the market anticipates as new supply eventually comes on line outside of China, and note that current Chinese domestic prices are supportive of MCP's valuation."
Gambardella notes that just since March 28, domestic prices for Ce are up 49% (to $8.99/lb from $6.05/lb), La up 75% (to $6.52/lb from $3.73/lb), and Nd up 23% (to $45.39/lb from $36.90/lb). He also notes that domestic prices are now close to double the level of export prices seen this summer.
Export price are also rising, albeit at a slower rate. Prices for Ce, La, and Nd are all up roughly a little over 20% since March 28, with Ce at $54.68/lb, La at $55.82/lb, and Nd at $99.68/lb.
A Chinese crackdown on illegal mining likely the cause for the rise in prices, Gambardella suggests.
For more ratings news on Molycorp click here and for the rating history of Molycorp click here.
Shares of Molycorp closed at $67.19 yesterday.
Analyst Michael F. Gambardella lifted his price target on the U.S.-based rare earth miner from $74 to $90 and reiterated his Overweight rating.
We feel comfortable with these higher numbers given the continued increase in domestic Chinese prices," Gambardella said. "We believe rare earth prices will not fall as significantly as the market anticipates as new supply eventually comes on line outside of China, and note that current Chinese domestic prices are supportive of MCP's valuation."
Gambardella notes that just since March 28, domestic prices for Ce are up 49% (to $8.99/lb from $6.05/lb), La up 75% (to $6.52/lb from $3.73/lb), and Nd up 23% (to $45.39/lb from $36.90/lb). He also notes that domestic prices are now close to double the level of export prices seen this summer.
Export price are also rising, albeit at a slower rate. Prices for Ce, La, and Nd are all up roughly a little over 20% since March 28, with Ce at $54.68/lb, La at $55.82/lb, and Nd at $99.68/lb.
A Chinese crackdown on illegal mining likely the cause for the rise in prices, Gambardella suggests.
For more ratings news on Molycorp click here and for the rating history of Molycorp click here.
Shares of Molycorp closed at $67.19 yesterday.
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