Canaccord Genuity raised its price target for USA Rare Earth Inc (NASDAQ: USAR) to $33.00 from $23.00 on Tuesday, while maintaining a Buy rating. At the time of the update, USAR was trading at $26.72 and had an approximate market capitalization of $3.5 billion.
The analyst firm said the target increase reflects newly announced financing options that it expects will accelerate the company's planned operational timeline. Canaccord singled out a proposed $1.3 billion senior secured loan under the CHIPS Act as an important improvement to USA Rare Earth's capital structure. That financing development was among the drivers cited for the stock's notable market move - the company recorded a roughly 39% gain over the prior week.
As a result of the altered financing outlook, Canaccord trimmed its weighted average cost of capital (WACC) assumption for USA Rare Earth from roughly 14% to 13%. The broker also updated its financial models to incorporate what it views as a faster path to operations enabled by enhanced access to capital.
Analyst targets for the stock are widely dispersed. According to InvestingPro data cited by the reporting, target prices among analysts range from $15 to $45, underscoring the breadth of expectations in the market for USA Rare Earth's future performance.
Separately, the company has outlined a package of proposed federal and private funding in a non-binding Letter of Intent with the U.S. Department of Commerce under the CHIPS Program. That package, as described, would total $1.6 billion in proposed federal support and comprises $277 million in federal funding plus a $1.3 billion senior secured loan. The financing plan is paired with a $1.5 billion private investment the company has identified.
The reporting further notes that the Trump administration plans to invest $1.6 billion in USA Rare Earth, which would result in the government holding a 10% stake in the company. In reaction to these funding developments and the prospect of expanded output, Benchmark raised its own price target on USA Rare Earth from $15 to $45 and maintained a Buy rating, citing increased production capacity. That capacity is expected to double to 10,000 metric tons annually under the revised plans.
Operational progress also advanced on the project execution front. USA Rare Earth selected Fluor Corp and WSP Global Inc as its Engineering, Procurement, and Construction Management (EPCM) partners for the Round Top Rare Earth Project in Texas. The companies will support advancement of the Definitive Feasibility Study for the project, with commercial production on the timeline for late 2028.
Canaccord's upgrade and the surrounding financing announcements have been reflected in the market reaction, but the funding remains a set of proposed arrangements and the company continues to progress through development milestones tied to feasibility work and project execution.