Goldman Sachs Starts Molycorp (MCP) at Neutral

Goldman Sachs initiates coverage on Molycorp (NYSE: MCP) with a Neutral rating and $11 price target, saying a positive view on growing leverage to higher-value, downstream products is balanced by management uncertainty and execution risk.

"Molycorp stock returns remain tightly correlated with commodity rare earths pricing, and we see potential value in the company's growing leverage to higher-value, downstream products (e.g., 65% of earnings in 2013E), as well as share gain potential in China," the analyst notes. "That said, our positive view is balanced by management uncertainty and execution risk ahead of a big capacity ramp in early 2013, and we await visibility into achievable cost targets to get more constructive."

For an analyst ratings summary and ratings history on Molycorp click here. For more ratings news on Molycorp click here.

Shares of Molycorp closed at $10.05 yesterday.

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