Benchmark has raised its price target on USA Rare Earth Inc (NASDAQ: USAR) to $45.00 from $15.00 and maintained a Buy rating on the shares, citing material changes to the companys projected production and revenue mix.
Valuation drivers
The analyst lift reflects Benchmarks revised assessment that USA Rare Earths magnet-making capacity will reach 10,000 metric tons annually (mta), up from the 5,000 mta previously used in its valuation. Benchmark also added revenue items that were not included in earlier models, specifically upstream revenues from the Round Top project and midstream revenues tied to metal-making operations. In addition, Benchmark said its updated model now contemplates potential revenue from third-party concentrate processing.
To derive the new target, Benchmark applied a 10x EV/EBITDA multiple to USA Rare Earths 2030 EBITDA guidance of $1.2 billion. That multiple was calculated on a fully diluted pro forma share count of 272 million shares, excluding warrants.
Financing and capital structure developments
USA Rare Earth has entered a non-binding Letter of Intent with the U.S. Department of Commerce seeking $1.6 billion in proposed financing through the CHIPS Program. That proposed package is described as comprising $277 million in federal funding and a $1.3 billion senior secured loan. Separately, the company has completed a private investment in public equity (PIPE) that raised $1.5 billion.
The report also notes a planned U.S. government investment of $1.6 billion under the Trump administration plan that would give the government a 10% stake. That transaction is described as the purchase of 16.1 million shares at $17.17 each, coupled with warrants for an additional 17.6 million shares at the same strike.
Project progress and partners
Benchmark highlighted ongoing progress at the Round Top mine and noted USA Rare Earths selection of Fluor Corp and WSP Global Inc as Engineering, Procurement, and Construction Management (EPCM) partners. Those appointments form part of a Definitive Feasibility Study that Benchmark says is underway and intended to accelerate the path to commercial production of heavy rare earth oxides by late 2028.
Notable editorial detail in the report
In addition to announcing the higher price target, Benchmarks materials include a reference that, following progress at Round Top, it has maintained a Buy rating and a price target of $15.00. The report presents both the revised $45.00 target and the previously cited $15.00 figure within its commentary.
What the analyst change means
Benchmarks update centers on significantly higher assumed output and the inclusion of new revenue lines in its valuation framework. The firms use of a 10x EV/EBITDA multiple on 2030 guidance and a pro forma share count underpin the numerical basis for the $45.00 target.
The story above summarizes Benchmarks published assessment and USA Rare Earths reported financing and project developments as presented in the analyst note.