[it's not just you, the stock is only up two bucks -ed]
From Notable Calls:
Molycorp (NYSE:MCP): Morgan Stanley sees $240/share Bull Case
Morgan Stanley is out positive on Molycorp (NYSE:MCP) raising their Bull case to $240/share (prev. $140) & reiterating their Overweight rating on the rare earths miner.If you don't remember the offering here's part of the prospectus cover:
Ok, seems I got your attention. The actual (base case) target is raised to $90 but who cares, we're talking about MCP here. Morgan Stanley notes they have a constructive view of rare earth oxides and of Molycorp’s prospects. REO fundamentals look favorable based on high-growth end markets and tight availability. They believe news flow regarding future Chinese rare earth policies, spot REO prices and advancement of MCP’s Mountain Pass project will be the key determinants of MCP share price until the start of production in mid-2012. MCP’s Mountain Pass mine is one of only two new REO projects (Mt. Weld in Australia being the other) outside China expected to come on line by 2012.
Spot prices continue to respond to tightening supply. Last year, Chinese export quotas declined ~40% from 2009. The basket price for MCP REO output rose 450% in 2H10, following the quota announcement. Prices are up another ~124% since the 1H11 quota announcement in late December. The rise in REO prices has been uneven though. Export cerium and lanthanum prices are ~600% higher than domestic Chinese prices, compared to ~120% higher for neodymium and praseodymium. Morgan Stanley notes they expect 2011 full-year quotas to be down ~20% yoy (base case), and a successful crackdown on illegal exports could drop supply outside China by as much as 40% yoy. While their conservative price deck is in line with consensus, they believe risks to pricing are still skewed to the upside as tightening supply meets rising demand....MORE
| Morgan Stanley_____________________________ | J.P. Morgan |
CIBC Credit Suisse
Stifel Nicolaus Weisel Dahlman Rose & Company Piper Jaffray
Knight/Houlihan Lokey
Griffiths McBurney Corp.
Prospectus dated July 29, 2010.
