The Department of War Is Doubling Down on MP Materials. Should You Buy MP Stock Here?

Core Insights - MP Materials has entered a transformative joint venture with the U.S. Department of War and Saudi Arabian mining company Maaden to develop a rare earth refinery in Saudi Arabia, enhancing Western access to critical materials for defense and clean energy [1] - The stock of MP Materials has seen gains following the announcement but remains down over 35% from its year-to-date high in mid-October [2] - The joint venture increases MP's geopolitical relevance and supply chain integration, reinforcing its position as a major U.S. supplier in a market largely dominated by China [3] Financial Implications - The partnership with the Pentagon, which guarantees a price floor of $110 per kilogram of neodymium-praseodymium oxide for the next decade, is expected to improve MP's growth prospects and margin potential [3] - Goldman Sachs has set a price target of $77 for MP Materials, maintaining a "Buy" rating, citing the company's dominant role in rare earth production and strategic vertical integration [5] - The expansion into refining and magnet production is anticipated to enhance MP's position in the supply chain, leading to improved margins and accelerated revenue and EBITDA growth over time [6] Market Dynamics - MP Materials is currently challenging its 100-day moving average at the $65 level, with a potential break above this level likely to accelerate bullish momentum heading into 2026 [4] - The developments from the joint venture and Pentagon deal are expected to translate into increased investor confidence in MP's global footprint, potentially driving its stock price to new all-time highs [4]