Energy Fuels (UUUU), MP Materials (MP)
Energy Fuels Inc. (NYSE: UUUU) and MP Materials Corp. (NYSE: PM) are two popular rare earth stocks that investors can consider amid growing demand for rare earth metals. Rare-earth minerals are essential to the development of modern technologies, including smartphones, clean energy, electric vehicle batteries, consumer electronics, healthcare, computer hard drives and system magnets. weapon guidance. New laws aimed at eliminating U.S. dependence on China for these metals will likely bolster U.S.-based rare earth stocks.
The United States is more focused on mining rare earth minerals
China is currently leading the global supply chain, as it has invested heavily in building infrastructure and capacity for the mining and refining of rare earth minerals. The world’s largest economy depends on China for about 80% of rare earth elements.
Considering that the United States is making significant progress in reducing its dependence on the supply of raw materials or finished products from China, the country is taking initiatives to significantly increase its capacity to extract and process minerals from land rare.
The US government aims to spend several billion dollars to improve US competitiveness in the mining and processing of rare earth elements.
Even US defense contractors are gradually reducing their reliance on Chinese microelectronics and specialty metals under pressure from the Pentagon and politicians. In fact, legislation banning the use of Chinese rare earth materials after 2027 could be passed in the next defense authorization law, according to a WSJ report.
Let’s dive deeper into how energy fuels and PM materials can be the right choices to get nice returns on space investment.
Energy Fuels (NYSE: UUUU)
With a market capitalization of $1.03 billion, Energy Fuels is expanding full commercial scale manufacturing capacity of high-purity rare earth element (REE) mixed carbonate. The company recently began commercial-scale partial REE separations at its White Mesa plant using its existing facilities.
In particular, Energy Fuels is a uranium mining company. This US-based company supplies triuranium octoxide (U3O8) to major nuclear power plants. She also makes vanadium from some of her projects.
In recently released earnings, the company said that the fundamentals of supply and demand in the underlying market indicate that prices will remain high going forward.
Are UUUU stocks a good buy?
Right now, UUUU stocks seem like a good investment option. As for Wall Street, analysts are very confident in UUUU stocks, which have a strong buy consensus rating based on five buys.
Notably, UUUU shares are down 23.3% so far in 2022, presenting an opportunity for investors to buy the dip. Energy Fuels’ average price target of $10.19 indicates the stock could rise nearly 56.5% from current levels.
Data from TipRanks shows that financial bloggers are 100% bullish on Energy Fuel, compared to the industry average of 74%.
MP Materials (NYSE: MP)
MP Materials is the largest producer of rare earths in the Western Hemisphere. With a market capitalization of $5.57 billion, the company owns and operates the Mountain Pass rare earth mine and processing facility.
The company signed a $35 million contract in early 2022 under the U.S. Department of Defense’s Industrial Base Sustainment and Analysis Program. The contract was awarded to support the construction of a commercial scale processing facility for heavy rare earth elements (HRE) at Mountain Pass.
MP Materials has managed to surprise earnings in all quarters over the past two years. If the trend persists, it can provide strong support for its share price performance in the coming quarters.
The company reported 96% year-over-year revenue growth driven by the higher realized price of rare earth oxide (“REO”) concentrate in the second quarter of 2022.
Is MP Materials stock a buy?
MP Materials stock appears to be a lucrative option to invest money in. According to TipRanks, the street is bullish on MP stock and has a strong buy consensus rating based on six buys.
Similarly, data from TipRanks shows that financial bloggers are 100% bullish on MP stocks, compared to the industry average of 74%.
However, MP shares are down 34.1% so far in 2022, representing a great long-term buying opportunity for investors. Additionally, MP’s average stock price forecast of $48.42 implies upside potential of 54.3% from current levels.
Conclusion: explore rare earth stocks as the outlook looks promising
It is undeniable that the world is witnessing a growing awareness and growing demand for clean energy and electric vehicles. This should also keep the demand for rare earth metals high. In such a scenario, US government efforts to scale up mining and processing efforts should support space players. In this bullish backdrop, investors can consider Energy Fuels and MP Materials as their stocks have more than 50% upside potential from their current levels.
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