UPDATE: SEC Probe Leads to Morgan Stanley Downgrade of Molycorp (MCP)
Tweet
Share
E-mail
Get Alerts MCP Hot Sheet
Price: $0.36 --0%
Rating Summary:
2 Buy, 6 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
2 Buy, 6 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Join SI Premium – FREE
(Updated - November 13, 2012 10:32 AM EST)
Since disclosing a SEC probe on Friday, shares of rare earth miner Molycorp (NYSE: MCP) are down 19 percent. Piling onto the carnage today is Morgan Stanley which cut its rating on Molycorp from Overweight to Equalweight, citing the overhang and uncertainty from the SEC investigation.
"We have no view on the eventual outcome of this investigation; it is possible that the worst case scenario is already priced in," Morgan Stanley analyst Paretosh Misra comments. "But given the uncertainty surrounding this issue and the possibility that it will take some time to resolve, we are moving to Equal-weight and removing our price target."
Commenting on possible outcomes from the SEC probe, the analyst notes the best case scenario is that this issue goes away without incident and that any concerns raised by the SEC are proven already to have been addressed in 3Q results. A worst case scenario may involve material changes and/or charges of some sort, they note.
Risk-reward in the shares remains attractive, the analyst said, moving their base case valuation goes to $12 from $18. Their bull case is $26 per share and assumes flawless execution and a favorable outcome of the SEC investigation. The bear case price target is $5 per share, or tangible book value.
For an analyst ratings summary and ratings history on Molycorp click here. For more ratings news on Molycorp click here.
Shares of Molycorp are down 2.4 percent.
Since disclosing a SEC probe on Friday, shares of rare earth miner Molycorp (NYSE: MCP) are down 19 percent. Piling onto the carnage today is Morgan Stanley which cut its rating on Molycorp from Overweight to Equalweight, citing the overhang and uncertainty from the SEC investigation.
"We have no view on the eventual outcome of this investigation; it is possible that the worst case scenario is already priced in," Morgan Stanley analyst Paretosh Misra comments. "But given the uncertainty surrounding this issue and the possibility that it will take some time to resolve, we are moving to Equal-weight and removing our price target."
Commenting on possible outcomes from the SEC probe, the analyst notes the best case scenario is that this issue goes away without incident and that any concerns raised by the SEC are proven already to have been addressed in 3Q results. A worst case scenario may involve material changes and/or charges of some sort, they note.
Risk-reward in the shares remains attractive, the analyst said, moving their base case valuation goes to $12 from $18. Their bull case is $26 per share and assumes flawless execution and a favorable outcome of the SEC investigation. The bear case price target is $5 per share, or tangible book value.
For an analyst ratings summary and ratings history on Molycorp click here. For more ratings news on Molycorp click here.
Shares of Molycorp are down 2.4 percent.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Silence Therapeutics closes $201M public offering of ADSs
- bioAffinity Technologies closes $4M private placement offering
- Realty Income closes $1B convertible notes offering
Create E-mail Alert Related Categories
DowngradesRelated Entities
Morgan StanleySign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
