UPDATE: JP Morgan Cuts PT to $5 on Molycorp on Collapsing Rare Earth Prices

JP Morgan reiterated its Underweight rating on Molycorp

and reduced its price target from $8 to $5. JP Morgan noted, "We are lowering our price target for UW-rated MCP to $5 from $8 to reflect our lower rare earth price forecasts and belief that MCP will only produce at its Phase 1 rate of 20k tonnes for the foreseeable future. … We continue to believe MCP will likely have to seek additional capital beyond just a revolver and/or equipment leaseback. Other risks we see include capex overruns at Mt. Pass and reaching targeted cost levels of $3/kg at the mine." Molycorp closed at $10.79 on Wednesday.