MP Materials Corp (MP) shares traded slightly lower Friday morning despite catching a bullish upgrade from JPMorgan—the kind of price action that makes you wonder if anyone's actually reading analyst reports anymore.

The National Security Angle

Analyst Bill Peterson moved the rare earth miner from Neutral to Overweight with a $74 price target, and his reasoning goes well beyond typical earnings projections. He's betting on MP's "underappreciated" national security importance and what he calls "unmatched earnings visibility."

Here's the thing: even with China reportedly pausing some export restrictions, Peterson argues that supply chain risks aren't going anywhere. MP Materials operates the only major rare earth mining and processing facility in North America, giving it a "mine-to-magnet" vertical integration that no other Western company can match. If you're the Pentagon and you need rare earths for defense applications, MP is basically your only phone call outside of Beijing.

The Pentagon Price Floor

The real kicker is MP's recent Department of Defense deal. JPMorgan sees this agreement, which includes a $110/kg price floor for neodymium-praseodymium (NdPr), as essentially locking in profitability for the next decade. That's the kind of downside protection most mining companies can only dream about.

The stock's recent tumble—down roughly 39% over the past month—is what JPMorgan considers an opportunity. Peterson acknowledges that "retail-driven volatility" will probably continue in the near term, but argues the government-backed business model offers compelling long-term upside.

The Reality Check

The upgrade comes after MP reported mixed third-quarter results, with revenue falling 15% after the company halted sales to China. So the business is clearly navigating some choppy waters, even as it positions itself as America's rare earth champion.

MP Price Action: MP Materials shares were down 0.47% at $57.27 at the time of publication Friday.