mcp to catch to rare earth prices - jp morgan

Analysts at JPMorgan made positive comments on Molycorp, Inc. (NYSE: MCP) today, noting that shares have essentially traded sideways since its secondary offering in mid-February despite the 45% surge in rare earth prices since that time.

Now the stock needs to play catch up.
MCP) Share Price Needs To Catch Up With Surging Rare Earth Prices - JP Morgan

"We think MCP's stock price, however, should start to catch up as investors become more aware of this recent surge and get a better understanding of the impact on MCP's NPV, even at much lower, long-term rare earth prices levels," analyst Michael F. Gambardella said.

Coming up with his $65 price target, Gambardella is already assuming a 66% reduction from current spot rare earth prices. "In fact, if we assumed current rare earth prices just stayed flat, MCP's NPV would be $215/share and our 2014 EPS would be $38," he shockingly states.

While the firm is maintaining their $65 price target on Molycorp, they believe rising rare earch prices should be a catalyst for MCP's stock and push it higher.

Shares of Molycorp are up 2.6% in early trading Tuesday.