TORONTO, May 3 (Reuters) - Shares of Molycorp Inc rose more than 8 percent on Tuesday morning after an analyst boosted the rare earth producer's target price by 47 percent, calling the company 'best in class'.
Dahlman Rose analyst Anthony Young said that he was raising the Colorado-based miner's target share price to $125 from $85 on a strong outlook for the price of rare earths, used in technologies such as smartphones and hybrid cars.
'We anticipate that rare earth pricing will be firmer for longer than we had previously anticipated,' Young said in a note to clients. 'We continue to view Molycorp as the best way to participate in the rare earth market.'
Molycorp shares were up 8.13 percent at $77.30 on the New York Stock Exchange on Tuesday morning.
The prices of the individual rare earth oxides have soared in the past year as China -- producer of about 95 percent of the group of 17 rare earth metals -- clamped down on exports.
Young said that recent deals to buy a rare earth processing facility in Europe, and a rare earth alloy plant in Arizona would bring Molycorp closer to goal of producing higher-value rare earth magnets, along with rare earth oxides, alloys and metals.
He added investors should expect more M&A from Molycorp.
'Over the medium- to long-term, we would expect the company to continue to be a consolidator in the rare earth industry,' Young said.
Dahlman Rose also initiated coverage of Avalon Rare Metals with a 'buy' rating, and Young said he expects the Toronto-based company to be the first primary producer of heavy rare earths outside of China. Shares were up 6.49 percent at C$8.86 on the Toronto Stock Exchange.
The investment bank also started coverage on Rare Element Resources and Quest Rare Minerals, sending shares in those Canadian juniors more than 4 percent higher. Shares of Molycorp and Avalon have both more than doubled in price in the past six months.
($1=$0.95 Canadian)
(Reporting by Julie Gordon; editing by Peter Galloway) Keywords: MOLYCORP SHARES/ (julie.gordon@thomsonreuters.com; +1 416 941 8136; Reuters Messaging: julie.gordon.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Dahlman Rose analyst Anthony Young said that he was raising the Colorado-based miner's target share price to $125 from $85 on a strong outlook for the price of rare earths, used in technologies such as smartphones and hybrid cars.
'We anticipate that rare earth pricing will be firmer for longer than we had previously anticipated,' Young said in a note to clients. 'We continue to view Molycorp as the best way to participate in the rare earth market.'
Molycorp shares were up 8.13 percent at $77.30 on the New York Stock Exchange on Tuesday morning.
The prices of the individual rare earth oxides have soared in the past year as China -- producer of about 95 percent of the group of 17 rare earth metals -- clamped down on exports.
Young said that recent deals to buy a rare earth processing facility in Europe, and a rare earth alloy plant in Arizona would bring Molycorp closer to goal of producing higher-value rare earth magnets, along with rare earth oxides, alloys and metals.
He added investors should expect more M&A from Molycorp.
'Over the medium- to long-term, we would expect the company to continue to be a consolidator in the rare earth industry,' Young said.
Dahlman Rose also initiated coverage of Avalon Rare Metals with a 'buy' rating, and Young said he expects the Toronto-based company to be the first primary producer of heavy rare earths outside of China. Shares were up 6.49 percent at C$8.86 on the Toronto Stock Exchange.
The investment bank also started coverage on Rare Element Resources and Quest Rare Minerals, sending shares in those Canadian juniors more than 4 percent higher. Shares of Molycorp and Avalon have both more than doubled in price in the past six months.
($1=$0.95 Canadian)
(Reporting by Julie Gordon; editing by Peter Galloway) Keywords: MOLYCORP SHARES/ (julie.gordon@thomsonreuters.com; +1 416 941 8136; Reuters Messaging: julie.gordon.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.