USA Rare Earth (NASDAQ:USAR) 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.



<h3>From Mine to Magnet</h3>



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.



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.



<h3>Closing the Loop</h3>



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.



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.



A strategic investment in French firm Carester further extends the European platform, with plans for a 3,750 MTPA plant in Lacq, France, co-located with Carester’s oxide and recycling facility.



<h3>Mobilization of Public Capital</h3>



Arguably, the most significant event is the pending $1.6 billion Department of Commerce funding agreement under the CHIPS Program. This deal (expected to finalize this month), alongside a $1.5 billion common stock PIPE closed in January and a $1.75 billion cash pile as of March 31, was the main driver behind the valuation upgrade.



The government support is not unique to USAR. The Trump administration has committed roughly $18.6 billion in financing for critical minerals across 60 projects, according to BMO Global analysts George Heppel and Max Yerrill.



“Never before in the USA’s history have we seen a mobilization of capital and policy in support of critical mineral supply at the scale of what has been achieved in the past two years,” the BMO analysts wrote, calling it a “great financial pivot.”



Yet, the large skew toward rare earths came at the expense of tungsten, antimony, nickel, cobalt, and other strategically important metals.



<h3>Risks Remain</h3>



Despite ‘Uncle Sam's' heavy backing, Cantor's analysts see several risks. Execution tops that list. USAR's path to profitability depends on successfully ramping magnet production, managing capital costs, and sustaining commercial demand across multiple sectors. Positive free cash flow might not arrive until 2029 per their model.



Supply chain security beyond 2027 is another concern, particularly for heavy rare earths. While light rare-earth feedstock agreements are in place through that year, analysts warn that securing dysprosium and terbium supply thereafter — absent a fully integrated supply chain — could put long-term earnings at risk.



Environmental compliance obligations and a thin domestic talent pool in rare earth processing round out the key risk factors.



Photo: Shutterstock

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PICK

USA Rare Earth (USAR) has received an upgrade from Cantor Fitzgerald, with analysts raising the 12-month price target to $35 due to accelerating production, a transformative acquisition, and strong U.S. government support. The company is set to enhance its magnet manufacturing capacity and expects significant revenue growth, with projections for 2026 and 2027 rising substantially. A $1.6 billion funding agreement under the CHIPS Program is a key driver for the valuation upgrade. However, risks remain, including execution challenges and supply chain security beyond 2027.

USA Rare Earth Gets An Upgrade As Government Redefines Sector Risk