Canaccord Raises USA Rare Earth (USAR) PT to $33 Following $1.6B CHIPS Program Commitment

USA Rare Earth Inc. (NASDAQ:USAR) is one of the new stocks on the rise. On January 27, Canaccord increased its price target for USA Rare Earth to $33 from $23, while maintaining a Buy rating. This followed the company’s announcement of a $1.6 billion letter of intent from the US Department of Commerce’s CHIPS Program and a collaboration with the Department of Energy. This federal backing led the firm to accelerate its operational timeline and update its financial estimates.

Although the firm noted a structural deficiency compared to peers, specifically a lack of government-guaranteed price floors and offtake agreements, management remains confident that the business model is sustainable without such protections, positioning the company as a key player in the domestic rare earth supply chain.

On the same day, Benchmark analyst Subash Chandra also raised the price target for USA Rare Earth Inc. (NASDAQ:USAR) to $45 from $15 with a Buy rating after the company secured 85% of the $4.1 billion required for full vertical integration. The capital includes $1.9 billion in government funding, which is surprisingly large in scale. The new target accounts for a doubling of projected magnet-making capacity to 10,000 metric tons annually, while also incorporating multiple revenue streams from upstream mining at Round Top, midstream metal-making, and third-party concentrate processing.

USA Rare Earth Inc. (NASDAQ:USAR) mines, processes, and supplies rare earths and other critical minerals in the US. It explores for neodymium, dysprosium, terbium, gallium, beryllium, lithium, and other critical minerals.

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Disclosure: None. This article is originally published at Insider Monkey.