**USA Rare Earth Stock Jumps 20% After Major French Subsidies & Analyst Upgrade**
Key Takeaways:
- USA Rare Earth (NASDAQ: USAR) shares surged 20% following a bullish analyst upgrade and strategic subsidies from France.
- Benchmark initiated coverage on USAR with a “Buy” rating and a $15 price target, citing upcoming oxide processing facility in Lacq, France.
- The French government will cover 45% of eligible equipment costs and provide €130 million in real estate funding, boosting investor confidence.
New York, NY — USA Rare Earth stock (ticker: USAR) shot up nearly 20% on heavy trading volume over the past 24 hours, fueled by a confluence of bullish news. The surge follows a “Buy” initiation from analysts at Benchmark and major financial backing from the French government for the company’s oxide processing facility under development in Lacq, France.
Benchmark Upgrade and Government Support Drive Stock Higher
Shares of USA Rare Earth (NASDAQ: USAR) gained by around $3.88 (+20%) to trade near recent highs, with volumes spiking to 14 million shares, compared to a daily average of 11.1 million. The immediate catalyst was a newly issued bullish call from Benchmark, which initiated coverage of the company with a “Buy” rating and a price target of $15 per share.
The rally was further bolstered by news that the French government will subsidize 45% of USAR’s equipment costs for its large-scale oxide processing plant in Lacq. Additionally, French authorities are committing €130 million (approximately $139 million USD) for real estate costs associated with the facility.
Benchmark’s report emphasized that this Lacq facility, once fully commissioned, could significantly reinforce Europe’s rare earth supply chain, making the project geopolitically and economically strategic in a sector long dominated by Chinese producers.
Strategic Efforts to Secure Rare Earth Metal Supply Chains
Rare earth metals—such as yttrium, hafnium, zirconium, and gallium—are essential for critical technology systems used in defense, clean energy, and various commercial applications. USA Rare Earth aims to expand its role in reducing Western dependence on foreign (largely Chinese) sourcing for these materials.
The Lacq facility project isn’t USAR’s only strategic endeavor. The company also just selected engineering giants Fluor Corp and WSP Global as its EPCM (Engineering, Procurement, and Construction Management) partners for the Round Top Rare Earth Project in Texas. The Texas project is designed to bring a domestic supply of heavy rare earth elements online while also supporting the U.S. and allied nations in building resilient supply chains.
“Fluor and WSP are key partners with the experience and expertise required to move Round Top toward commercial delivery,” said Alex Moyes, Vice President of Mining & Processing at USA Rare Earth. Moyes highlighted the partners’ track record in executing complex mining operations as crucial to USAR’s long-term success.
Rare Earth Sector Gains Broader Momentum
The growing investor appetite for companies focused on domestic or allied rare earth production is broader than just USAR. Shares of MP Materials (NYSE: MP)—another rare earth mining firm—also rose by 7% following renewed investor attention. Earlier in July, MP Materials secured a key partnership with the U.S. Department of Defense to spearhead a domestic rare earth magnet supply chain.
MP’s government-backed commitment mirrors the reasoning behind Benchmark’s bullish stance on USAR: Western governments are actively reducing reliance on critical technology imports from geopolitical rivals and instead emphasizing domestic or allied production routes. With election-year uncertainties surrounding trade, defense, and industrial policy, stocks like USAR and MP are seen as policy-aligned picks with long-term government support.
Strategic Outlook: Bullish Sentiment May Persist if Execution Holds
Investors are optimistic, but USA Rare Earth will need to deliver on construction timelines and processing targets at both its French and Texas sites to sustain momentum. The company’s unique dual-geography strategy—balancing European and U.S. projects—positions it advantageously amid a global arms race for technological independence.
While further analyst upgrades or government agreements could push the stock higher, updates on construction milestones and initial production benchmarks in late 2024 and early 2025 will be closely watched. A successful commissioning of its Lacq facility could validate Benchmark’s $15 price target, which represents roughly 30-40% upside from current levels.
This comes at a time when major economies are aligning capital and policy to accelerate reshoring critical components, adding broader tailwinds to the rare earth sector generally—and to USA Rare Earth specifically.
Frequently Asked Questions
Q: Why is usar stock trending?
A: USA Rare Earth stock is trending due to a 20% surge following a buy rating from Benchmark and significant French government subsidies for its oxide processing facility.
Q: What happens next?
A: Investors are awaiting updates on facility construction progress in France and Texas, with commissioning likely expected in late 2024 or early 2025.
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