Morgan Stanley upgrades mining stock as best pick to play rare earths

The rare-earth miner MP Materials will enjoy growing strategic value to the U.S., as geopolitical tensions with China make the supply of critical minerals more uncertain, according to Morgan Stanley.

The investment bank upgraded MP Materials to the equivalent of a buy rating with a stock price target of $34 per share, implying 32% upside from Friday's close.

MP Materials owns the only operating rare earth mine in the U.S. at Mountain Pass, California. China dominates the global market for rare earth refining and processing, according to Morgan Stanley.

"Geopolitical and trade tensions are finally pushing critical mineral supply chains to top of mind," analysts led by Carlos De Alba told clients in a Thursday note. "MP is the most vertically integrated rare earths company ex-Ch