Bullish Analyst Cuts Targets Amid 'Hard Landing for Rare Earth Prices' (AVL) (MCP) (REE)

Stocks in the Rare Earth group have been volatile Tuesday morning as one of the few analyst firms which cover the sector took a cautious stance in an earlier research note.

Dahlman Rose, in a report entitled "Analyzing A Hard Landing for Rare Earth Prices," said while the firm remains optimistic over the long-term, it is cutting estimates for rare earth prices "to what we view to be the marginal cost of production..."

The firm now sees long-term prices for lanthanum and cerium at an average price of $12/kg, down sharply from a prior estimate of $30/kg. Dahlman is comfortable with its estimates for dysprosium and europium prices; the firm actually boosted its forecast for these metals.

Despite "compelling value in many of the equities" in the group, Dahlman Rose lowered price targets across the board:

• Avalon Rare Metals (NYSE: REE) from $15 to $8;
  
• Molycorp (NYSE: MCP) from $120 to $70, and
  
• Rare Element Resources (NYSE: RE)) from $21 to $9.

The firm reiterated Buy ratings on Avalon, Molycorp and Rare Element Resources.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Beijing Kingsoft Office Software Inc (688111:CH) PT Lowered to RMB303 at Jefferies
• Morgan Stanley Starts Jersey Mike's Subs (JMKE) at Overweight
• HSBC Downgrades Kakao Corp. (035720:KS) to Hold