MP Materials（MP.US）二季报解读：近期回调提供入场机会

ReutersMP.N BloombergMP US North AmericaUnited States Valuation & Risks Into the 2Q26 Print: Recent pullback offers anentry point . Buy rating PT $61 Corinne BlanchardResearch Analyst+1-904-645-2360 Recent stockperformanceoffers an entry point to investors*********Please join us Wednesday July 15that 10am:Fireside Chat: Rare EarthsDeep Dive w/ Benchmark-Market Insights & Industry Outlook.********* Mike McNultyResearch Associate+1-904-887-0349 MP stock is down ~24% since May 1st, now tradingright around the $50/sh mark(as of 7/7close), and is down31% from its YTDhigh.This follows asolid 2H25performanceafterthe announcement of the DoD deal (see here for reference) anda bunch of other keyheadlines both MP specific and industry wise:Applerecycling agreement, heavies, peer funding/support from government(LYCandUSARnotes),Chinadevelopments. However, investor enthusiasm has drasticallydiminished in the last several weeksand are now looking again at the fundamentalperformance and overall execution. Key changesPrice target (USD)7061-13%Source: Deutsche Bank Ourfocus on MP has always revolved around the fundamental execution,production,cost profile and we believe this ispositivefor thecompany to see thatbuysidefocus too. On valuation, we believe MP deserves a premiumdue to its unique marketposition and beinga strategic player increasing its value proposition in the rare-earth supply chain by moving downstream with both private contracts andUSgovernment agreements, mitigating exposure to commodity pricing.We remainbuyer ofMP Materials, ourPT is now $61, based on a 20x 2028e EBITDA (vs 22xprior). We view the current stock price as an entry point for investors looking to gainexposure to the most scaled and established Western rare earths player. •On a two-year forward EV/EBITDA basis, MP’s stock has seen reversionfrom its post-DoD announcement multiple and now trades in line with itstwo-year average and at the low end of its one-year rolling range.However, due to MP unique market positioningthe only US-based 'mineto magnet', we believe the stock warrants a premium andchoose to valueMP at 20x2028e. The charts below show the Z-score of implied volatility based on three-month calloptions for MP and the SPX index. As demonstrated by the chart, the optionsmarket is pricing in less volatility for MP relative to its one-year average. Source:Deutsche Bank Research, Bloomberg Finance LP 2Q26e Preview MPis expected to report 2Q26 results on August6thpost-market (DB estimate);conference call at 5.00pm ET. DB estimate changes:We maintained most of our assumptions going into the2Qresults,thoughmodestlyupdatedour PPA income on concentratebased onmarket pricing trends. •Volumes: We expect 2Qproduction volumes of~11.2kt for concentrateand 870t for NdPr (-1% vs Street), unchanged vs prior. We assumemagnetics / precursor Revenue of $21m, flat QoQ. For sales volumes, weforecastNdPr of 875t,+3%vs Street but down 13%QoQ.Ourassumption is aligned with Management guidance of ‘down middle singledigitQoQ’(DBe-5%). •Pricing:We maintained our pricing assumptions for NdPr at $92/kg (flatvs prior, but 3% below Street). We feelcomfortable with this assumptiongiven current spot pricing trends(down 1.3%over the past 3 months),taking into account a time lag. •Costs:We expect 2Qcosts of $90m (including both production costs andD&A). This includes production costs of $64m (vs $74m QoQ) on lowerproduction volumes for both REO andNdPr. •PPA benefit: We forecast aPPA benefit of $18m, up from ~$17m prior.We increased our assumption based on lower spot NdPr pricing (thoughrealized pricing for Revenues is unchanged) and the assumption that MPwill use some of the PPA benefit on concentrate produced. •We anticipate 2Q26revenues of $102mvs the Streetof $97m andadj.EBITDAof $32m,in-line with Street. •Net loss and EPS:We forecast EPS of negative 7c and 0c for adj. EPS.This compares to 1Q of negative 4c and 3c, respectively. Adj. net incomeis now forecast at $0m; this compares to the Street at $1m. What matters most to investors •China’s export ban: headlines or material?During the quarter,Chinaimposed export controls onMP and USAR, citing national securityconcerns (click here to view full article). While the move garnered severalheadlines,we view it as largely immaterial forMP. The company haspositioned itself as theUSrare earth champion, and a key part of thatstrategy has beendiversifying its supply chain away fromChina. This washighlighted in our note postManagement Dinner and Analyst Day. •10x updates:We believe this will be a key focus point for investors andthe sellside on the call; however, given the company only broke groundon the project in 1Q, we expect limited material updates on this front. •2026e earningscadence:2026 is expected to show a lumpy earningsprofile due to (i) the wind-down of deferred revenues from precursorproductsand(ii)the gradual ramp-up of final magnets post GMqualification. The timing of these two moving part