Molycorp, Inc. (NYSE: MCP) is seeing its shares under pressure today on an analyst downgrade after last week’s earnings report. The U.S. rare earth leader (a monopoly for now) reported a profit as its volumes and average selling prices rose in the quarter and it targeted sales growth in 2012 with REO production of about 8,000 metric tonnes to 10,000 metric tonnes. Shares were up over $30.00 briefly after earnings but that did not hold.
Today’s downgrade came from Piper Jaffray & Co. and the report seems a bit late on the surface. The rating change was down to Neutral from Overweight and more important is that the price target fell to $28 from $50 in the new call. In short, Piper Jaffray was already way ahead of the stock. Now this move puts the company in a more fully valued scenario as far as forward price-to-earnings expectations are concerned. Still, this is a stock which can fluctuate wildly on news out of China regarding rare earth material quotas.
Molycorp shares are down 3.8% at $25.79, and the 52-week trading range is $23.05 to $79.16.
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