USA Rare Earth (NASDAQ:USAR) Trading Down 6% - Here's Why

Key Points

• USAR shares fell 6% to about $16.04 as hopes for improved U.S.-China relations reduced expectations that trade restrictions would support a scarcity premium for U.S. rare-earth producers.
• USA Rare Earth broke ground on a planned South Carolina rare-earth metals and magnet facility, representing an expected $1.2 billion investment and approximately 490 new jobs.
• Analysts remain broadly positive, with 10 Buy ratings and one Sell rating and a consensus price target of $33.71, but the company remains speculative after missing its latest quarterly EPS estimate and reporting a $0.15 per-share loss.

USA Rare Earth Inc. (NASDAQ:USAR - Get Free Report)'s share price was down 6% during mid-day trading on Thursday . The company traded as low as $16.00 and last traded at $16.04. 16,960,073 shares traded hands during trading, an increase of 4% from the average daily volume of 16,374,325 shares. The stock had previously closed at $17.06.

USA Rare Earth News Roundup

Here are the key news stories impacting USA Rare Earth this week:

• Positive Sentiment: USA Rare Earth broke ground on a South Carolina rare-earth metal and magnet facility representing an expected investment of approximately $1.2 billion. The project is expected to create about 490 jobs and expand the company’s integrated mine-to-magnet supply chain for defense, aerospace, semiconductor, energy and other advanced industries. USA Rare Earth Breaks Ground on Advanced Rare Earth Metal and Magnet Manufacturing Facility
• Positive Sentiment: A MarketBeat feature included USAR among materials and energy stocks priced below $20 with Moderate Buy ratings, highlighting analyst price targets that imply substantial potential upside if rare-earth and domestic critical-materials growth plans succeed. 3 Under-$20 Stocks Tied to the Future of U.S. Energy and Materials
• Neutral Sentiment: A recent analysis described USAR as a potentially attractive “buy-the-dip” opportunity because of its manufacturing and supply-chain developments, but emphasized that the stock remains highly speculative and well below its prior high. USA Rare Earth Stock Is Down 60% -- Is September the Month to Buy the Dip?
• Negative Sentiment: Rare-earth shares sold off after signs of diplomatic warming between Washington and Beijing reduced expectations that trade restrictions would sustain a scarcity premium for U.S. producers. The development challenges the policy-driven rationale behind the sector’s earlier rally. Rare Earth Stocks Tumble on U.S.-China Thaw Hopes

Wall Street Analyst Weigh In

A number of brokerages recently issued reports on USAR. Needham & Company LLC decreased their price objective on shares of USA Rare Earth from $39.00 to $33.00 and set a "buy" rating on the stock in a research note on Wednesday, July 22nd. Wall Street Zen raised USA Rare Earth from a "strong sell" rating to a "sell" rating in a report on Saturday, May 16th. Jefferies Financial Group initiated coverage on USA Rare Earth in a report on Wednesday, September 2nd. They set a "buy" rating and a $21.00 price target for the company. Weiss Ratings downgraded USA Rare Earth from a "sell (d)" rating to a "sell (d-)" rating in a research report on Tuesday, August 11th. Finally, Roth Capital reduced their price objective on USA Rare Earth from $40.00 to $30.00 and set a "buy" rating on the stock in a research note on Tuesday, July 21st. Ten research analysts have rated the stock with a Buy rating and one has given a Sell rating to the stock. According to MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and a consensus target price of $33.71.

USA Rare Earth Stock Performance

The company has a fifty day moving average of $17.44 and a two-hundred day moving average of $19.95. The company has a market cap of $3.58 billion, a price-to-earnings ratio of -6.60 and a beta of 2.58.

USA Rare Earth (NASDAQ:USAR - Get Free Report) last released its quarterly earnings results on Monday, August 10th. The company reported ($0.15) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.07) by ($0.08). The firm had revenue of $5.82 million for the quarter. Equities analysts expect that USA Rare Earth Inc. will post -0.62 EPS for the current fiscal year.

Institutional Trading of USA Rare Earth

Several institutional investors have recently added to or reduced their stakes in the stock. Carlson Financial Inc. raised its holdings in USA Rare Earth by 5.7% during the 2nd quarter. Carlson Financial Inc. now owns 11,780 shares of the company's stock worth $254,000 after purchasing an additional 635 shares during the last quarter. Sterling Capital Management LLC lifted its stake in shares of USA Rare Earth by 29.1% in the 1st quarter. Sterling Capital Management LLC now owns 3,676 shares of the company's stock valued at $56,000 after purchasing an additional 829 shares during the period. SBI Securities Co. Ltd. boosted its position in shares of USA Rare Earth by 20.4% during the 4th quarter. SBI Securities Co. Ltd. now owns 5,522 shares of the company's stock valued at $66,000 after purchasing an additional 936 shares in the last quarter. First PREMIER Bank increased its holdings in USA Rare Earth by 100.0% in the second quarter. First PREMIER Bank now owns 2,000 shares of the company's stock worth $43,000 after purchasing an additional 1,000 shares in the last quarter. Finally, Advisory Services Network LLC lifted its stake in USA Rare Earth by 2.0% in the third quarter. Advisory Services Network LLC now owns 52,366 shares of the company's stock valued at $900,000 after buying an additional 1,032 shares during the period.

USA Rare Earth Company Profile

USA Rare Earth NASDAQ: USAR is a development-stage critical minerals company focused on advancing a fully integrated rare earth element (REE) and lithium project in the United States. Its flagship asset is the Round Top deposit in West Texas, a large, polymetallic concentration of light and heavy rare earth elements, lithium and other co-products. The company seeks to move this asset through resource delineation, pilot-scale processing and eventual commercial production to address growing domestic demand for secure REE supply chains.

In addition to exploration, USA Rare Earth is engineering an on-site separation facility that will utilize dry magnetic separation and hydrometallurgical flowsheets to produce mixed rare earth carbonates.

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