After announcing a major deal with the U.S. government on Thursday that sent its stock rocketing upward in that session, rare earths producer MP Materials (MP -0.42%) is heading still higher on Friday morning. Besides the sustained enthusiasm from yesterday's news, investors are loading up on MP Materials stock after an analyst provided a bullish new price target.
As of 10:17 a.m. ET on Friday, shares of MP Materials stock had climbed 6.5%.
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Thursday's move was just the beginning, according to one analyst
Canaccord Genuity analyst George Gianarikas thinks that the stock's recent climb won't merely be sustained but will continue. According to Thefly.com, Canaccord more than doubled its 12-month price target on MP Materials to $55 from $27 in recognition of the company's newly announced deal. The Department of Defense is making a multibillion-dollar investment in the company to secure the nation's supply of rare earths -- critical materials used in a variety of defense and civilian applications.
That new $55 price target implies 21.6% upside from the stock's closing price of $45.23 on Thursday.
Will MP Materials continue to soar?
For investors weighing whether to click the buy button on MP Materials stock in light of Canaccord's bullish price target, it's important to recognize that analysts often focus on shorter time frames, rather than the long-term investing horizons that the Motley Fool prefers. Consequently, it's best to take their price targets with a grain of salt, and, instead, examine each company's fundamentals thoroughly.
In general, however, it's fair to say that MP Materials' agreement with the Defense Department is impressive, and it may well contribute strongly to the company's prosperity. Whether the stock will keep rising elevated in the near future remains uncertain, but in the long run, MP Materials will likely flourish.
