Roth/MKM has increased its price target for USA Rare Earth Inc (NASDAQ: USAR) to $35.00 from $25.00 and continues to rate the shares as a Buy. The revised target implies approximately 35% upside relative to the most recent quoted price of $25.93, while InvestingPro data indicates the shares could be trading above their Fair Value.
The broker's target adjustment follows USA Rare Earth's disclosure that it secured a mix of favorable debt and equity funding from the U.S. government alongside a simultaneous private investment in public equity (PIPE) financing in excess of $1 billion. Those capital commitments arrive as the company, with a market capitalization of $3.54 billion, holds more cash than debt on its balance sheet according to InvestingPro data.
Roth/MKM concluded that the funding package will relatively fully fund USA Rare Earth's plans to initiate domestic production activities, including extraction of rare elements and critical minerals at its Round Top facility by the end of the decade. The research firm said the newly available financing materially strengthens the company's planned actions and significantly improves the odds of establishing a domestic, end-to-end rare earth value chain over the coming years.
USA Rare Earth's strategic objective is to build a complete domestic supply chain for rare earth elements, materials that are crucial to numerous high-technology applications and which the U.S. government regards as strategically important.
In related corporate financing announcements, the company has outlined proposed federal support totaling $1.6 billion under a non-binding Letter of Intent with the U.S. Department of Commerce. That breakdown includes $277 million in direct federal funding plus a $1.3 billion senior secured loan under provisions of the CHIPS Act. The proposed federal support is presented alongside a broader private capital effort described as $1.5 billion raised through a private investment initiative, which cites major contributions from Inflection Point and large mutual fund complexes.
Separately, the Trump administration is reported to plan a $1.6 billion investment that would translate into a 10% ownership stake in USA Rare Earth, a move highlighted as significant within the critical minerals sector.
Other sell-side analysts have also adjusted their targets following these financing developments. Canaccord Genuity raised its target to $33 from $23 and maintained a Buy rating, saying improved financing options could speed up the company's operational timetable. Benchmark sharply increased one of its price targets from $15 to $45 and kept a Buy rating, citing expanded production capacity now expected to reach 10,000 metric tons annually. In addition, Benchmark is reported to continue supporting USA Rare Earth's efforts at the Round Top mine with a separate Buy rating and a $15 price target as the company advances a definitive feasibility study in collaboration with partners Flour and WSP.
Taken together, the analyst revisions and the mix of proposed federal and private funding mark a concentrated period of capital deployment and strategic positioning for USA Rare Earth as it seeks to translate financial commitments into operational capacity. The company’s stated near-term milestones include establishing domestic extraction operations at Round Top by the end of the decade and moving toward a vertically integrated rare earth supply chain in subsequent years.
Contextual note - The funding arrangements and analyst target changes summarized here are based on the company disclosures and analyst communications. Some elements, such as the Department of Commerce Letter of Intent, are described as non-binding in the company's communications.