USA Rare Earth Gets An Upgrade As Government Redefines Sector Risk

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USA Rare Earth is shaping up as the go-to rare earth stock in the West, according to Cantor Fitzgerald.

The firm's analysts, Derek Soderberg and Drew Nordquist, raised their 12-month price targets to $35 from $30, reiterating an Overweight rating.

There are several catalysts supporting the bull case. Production is accelerating, a transformative acquisition is closing, European production is expanding, and the strong U.S. government backing is de-risking the investment thesis.

From Mine to Magnet

USAR commissioned phase 1a of its Stillwater, Oklahoma, magnet manufacturing facility in March, setting up initial commercial shipments for the second quarter of 2026. The 600 metric tons per year production line should reach full run-rate capacity by year-end, with phase 1b bringing total Stillwater capacity to 1,200 metric tons in the first quarter of 2027.

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Soderberg and Nordquist said they will be closely monitoring the magnet production learning curve — yield improvement, throughput, and equipment effectiveness — as the company moves from commissioning to commercial scale.

Revenue estimates more than doubled in the latest note, with 2026 projections rising to $80.8 million from a prior $40.4 million, and 2027 estimates surging to $453.3 million from $197.2 million.

Closing the Loop

The revision reflects the inclusion of Serra Verde‘s contribution following an expected third-quarter acquisition close. After the share appreciation, the $2.8 billion transaction is now worth closer to $3.64 billion.

The Brazilian miner is one of the few large-scale producers of heavy rare-earth elements outside China. Thus, it has an outsized impact on efforts to reduce dependence on Asian supply chains.

USAR expects Serra Verde to achieve annualized run-rate EBITDA of $550–$650 million by end-2027, with the combined entity targeting approximately $1.8 billion in annualized EBITDA by end-2030.

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Alongside the Serra Verde deal, USAR’s Less Common Metals (LCM) subsidiary in Cheshire, UK, achieved its first commercial pour of 99%–99.5% purity yttrium metal in April — a milestone for aerospace-grade thermal barrier coatings. LCM is targeting 3,000 MTPA of metal-making and alloy capacity by year-end.