UPDATE: DA Davidson Starts Molycorp at Buy, $7 Price Target
DA Davidson's Avinash Kant initiated coverage on Molycorp (NYSE: MCP) with a Buy rating and $7 price target. The analyst believes Molycorp is "poised to become a leading player in the rare earth market."
Kant pointed out the company has recently committed around $1.5 billion to streamline its vertically-integrated manufacturing process, also noting these "materials are critical enablers in several emerging high-growth applications such as semiconductors, hybrid and electric vehicles, wind power turbines, fiber optics, lasers, global positioning systems, and guidance & control devices."
"...the implementation of some unique recycling technologies, the use of lower energy cost processes, and the resource advantage from Mountain Pass should help Molycorp become the low-cost supplier in the industry," according to the DA Davidson analyst.
With Molycorp shares down very modestly to $4.91 at last check, Kant's new price target implies potential upside of about 43 percent.
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