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The Zacks Analyst Blog Highlights: BHP Group, Materion Corp, Tronox, MP Materials and Freeport-McMoRan

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·6 min read
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For Immediate Release

Chicago, IL – July 19, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: BHP Group BHP, Materion Corp. MTRN, Tronox Holdings plc TROX, MP Materials Corp. MP and Freeport-McMoRan Inc. FCX.

Here are highlights from Friday’s Analyst Blog:

U.S. Bulks Up Rare Earth Production: 5 Stocks to Track

According to the U.S. Geological Survey, China was responsible for 80% of rare earth imports in 2019. While the pandemic caused disruptions in the supply chain and exports fell short last year, China’s dominance over the rare earth market cannot be denied. After all, the country currently holds about 70% of the world’s known rare earth reserves.

The group of 17 elements is used in electric vehicles (EV), batteries, renewable energy systems and a wide range of electric appliances, ranging from smartphones, display panels, speakers, televisions and more. Cerium and neodymium are commonly used in smartphones, flat-screen TVs and LED lights as well as in F-35 fighter jets and missiles, radar and lasers by the U.S. Department of Defense. Elements like lanthanum are used in oil refining.

America is making an effort in upping its game in rare earth element production as several big trends are at play. President Joe Biden’s administration has massive investments planned in climate change technology, and rare earth elements are essential to this change. However, as the name suggests, these elements are not widely available, and extracting, processing and refining these elements entail several political and environmental issues.

Recently, Lynas Rare Earths Limited (LYSCF) received a $30-million grant from the U.S. government to open a new processing facility with Blue Line. The plant is one of the many rare earth production plants that Biden hopes to open in order to boost production and reduce reliance on China for the elements.

On Jul 13, the Senate Democrats reached an agreement on a $3.5-trillion budget plan that encompasses an expansion in Medicare, fund climate change initiatives and fulfill other parts of Biden’s economic agenda. The Democrats hope to pass this budget plan on top of a bipartisan infrastructure bill, which will surely aid the rare earth mining space.

As Biden plans to boost the EV market, supply-chain vulnerabilities might pose hindrances. In February, Biden ordered a federal review analysis of supply-chain vulnerabilities to make better investments in mines abroad and boost refining.

To address issues on groundwater and air pollution, as rare earth mining creates radioactive waste byproducts, the White House holds up an Initiative for Responsible Mining Assurance as a model for the mining industry. This model includes mining companies, unions and groups of advocates, and plans to create environmental and human rights principles for this industry.

In fact, it emphasizes getting prior and informed consent from Indigenous communities and local residents before mineral processing operations. Additionally, mining and processing companies have to arrange for the permanent disposal of toxic waste and build waste treatment facilities.

5 Stocks to Keep an Eye On

It may take America time to lower its reliance on China for rare earth elements but the new government funding will boost production which open up investment opportunities that investors should watch out for. Per a Valuates.com report, the global rare earth elements market size is projected to reach $3757.7 million by 2026, up from $2664.5 million in 2020, at a CAGR of 5.9%.

BHP Group engages in the exploration, development, and production of oil and gas properties, and also engages in mining of copper, silver, zinc, molybdenum, uranium, gold, iron ore, and metallurgical and energy coal. The company's expected earnings growth rate for the current year is more than 100% compared with the Zacks Mining - Miscellaneous industry’s projected earnings growth of 18.9%.

The Zacks Consensus Estimate for the company’s current-year earnings has been revised 21.7% upward over the past 60 days. BHP Group currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Materion Corp produces PVD rare earth elements for modern technologies and supports most major OEM thin film deposition platforms. The company's expected earnings growth rate for the ongoing year is 57.1% compared with the Zacks Mining - Miscellaneous industry’s projected earnings growth of 18.9%.

The Zacks Consensus Estimate for the company’s current-year earnings has been revised nearly 1% upward over the past 60 days. Materion holds a Zacks Rank #2 (Buy), at present.

Tronox operates titanium-bearing mineral sand mines, and beneficiation and smelting operations. The company's expected earnings growth rate for the current year is more than 100% compared with the Zacks Chemical - Diversified industry’s projected earnings growth of 27.6%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 6.7% upward over the past 60 days. Tronox presently carries a Zacks Rank #3 (Hold).

MP Materials engages in the ownership and operation of integrated rare-earth mining and processing facilities. This Zacks Rank #3 company's expected earnings growth rate for 2021 is 81.5% compared with the Zacks Mining - Miscellaneous industry’s projected earnings growth of 18.9%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised nearly 29% upward over the past 90 days.

Freeport-McMoRan engages in the mining of mineral properties. This Zacks Rank #3 company's estimated earnings growth rate for the ongoing year is more than 100% against the Zacks Mining - Non Ferrous industry’s projected earnings decline of 1.3%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 10.2% upward over the past 60 days.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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FreeportMcMoRan Inc. (FCX) : Free Stock Analysis Report
 
BHP Group Limited Sponsored ADR (BHP) : Free Stock Analysis Report
 
Materion Corporation (MTRN) : Free Stock Analysis Report
 
MP Materials Corp. (MP) : Free Stock Analysis Report
 
Tronox Holdings PLC (TROX) : Free Stock Analysis Report
 
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