Molycorp Continues to Weigh on Rare Earth Stocks
Molycorp (NYSE:MCP), a rare earth miner, has been reeling under the weight of a downgrade from a perma bull on the stock – Mike Gambardella of JP Morgan. His price target has been slashed from $105 to $66 owing concerns to rare earth prices declining on forecasted world demand being cut.
Investing Insights: Exclusive PIMCO Interview: What Will Drive Commodities Higher for Years?
Gambardella also claims that the price decline has been triggered by Chinese speculators who had initially driven up the price. Molycorp has lowered their 2011 EPS from $2.44 to $1.75, 2012 from $6.10 to $3.15 and 2013 from $14.55 to $11.20. For this year, the firm cut Q311 from $0.86 to $0.70 and Q4 from $1.10 to $0.56.
Gambardella has advocated a cautious stance on the stock, even though he is confident the Chinese government will likely take pro-active steps in favor of the industry.
Molycorp (NYSE:MCP) is trading at $40.55 today, down 2.22%. Shares are down 18% year to date. The stock’s trading range for the year is between $22.41 and $79.16.