Morgan Stanley Reiterates Equal-Weight Rating on Molycorp

In a report published Friday, Morgan Stanley reiterated its Equal-Weight rating on Molycorp MCP. Morgan Stanley noted, “No update on ramp up at Project Phoenix suggests costs could remain high in 4Q while REO prices declined ~26% to $24/kg. As demand remains weak, we see near-term risk to margins until production rate moves above ~15ktpy. Lowering 4Q EPS estimate to $(0.20). 4Q rebound in earnings looks unlikely. Lack of an update about ramp up at Project Phoenix raises the risk of costs remaining high in 4Q. Additionally, with average REO prices 19% below 3Q on one month lag, we do not expect 4Q earnings to rebound.” Molycorp closed on Thursday at $9.30.