Molycorp (MCP) Shares Lower as Analyst Highlights Recent Decline in Chinese Rare Earth Prices
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Price: $0.36 --0%
Rating Summary:
2 Buy, 6 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
Rating Summary:
2 Buy, 6 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
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Investors are selling shares of Molycorp (NYSE: MCP) Tuesday afternoon as analysts at the commodities-focused Dahlman Rose issued a note earlier suggesting rare earth prices out of China are beginning to fall following almost two months of stability. The stock last traded at $29.31, down 2.2 percent for the session.
The firm cites data from Metal Pages as showing cerium prices are down 9 percent and lanthanum prices are down 15 percent recently. Dahlman Rose points to Molycorp's "extensive exposure" to these two rare earths; about 80 percent of the company's metal contains either cerium or lanthanum.
"While we believe that demand for these materials has slightly decreased in light of the signifacntly higher pricing environment that was present during the summer, we also believe that destocking in China continues to push prices lower," Dahlman analysts said. Despite this concern, the firm said it continues to expect Molycorp to "enjoy tremendous margins."
Dahlman Rose maintains a Buy rating and $70 price target on shares of Molycorp.
The firm cites data from Metal Pages as showing cerium prices are down 9 percent and lanthanum prices are down 15 percent recently. Dahlman Rose points to Molycorp's "extensive exposure" to these two rare earths; about 80 percent of the company's metal contains either cerium or lanthanum.
"While we believe that demand for these materials has slightly decreased in light of the signifacntly higher pricing environment that was present during the summer, we also believe that destocking in China continues to push prices lower," Dahlman analysts said. Despite this concern, the firm said it continues to expect Molycorp to "enjoy tremendous margins."
Dahlman Rose maintains a Buy rating and $70 price target on shares of Molycorp.
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