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1211: Rare Earth Agreement Will Drive Future Margin Expansion And Earnings Repricing

Phosphate 3 And Energy Transition Will Foster New Opportunities

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1211
AnalystHighTarget
Not Invested
Published 02 Jun 2025

Update shared on 14 Dec 2025

Fair value Increased 20%
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AnalystHighTarget's Fair Value
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1Y
11.2%
7D
-3.5%

Analysts have raised their price target for Saudi Arabian Mining Company (Ma'aden) from SAR 60.00 to about SAR 71.80, citing expectations of slightly slower revenue growth, offset by improved profit margins and a higher justified future price to earnings multiple.

What's in the News

  • Ma'aden signed a binding term sheet with MP Materials and Mountain JV, LLC to establish a rare earth refining and separation facility in Saudi Arabia, subject to customary regulatory and corporate approvals (company filing).
  • The agreement includes an advisory arrangement under which MP Materials will help Ma'aden develop a bankable feasibility study for the Jabal Sayid mine project (company filing).
  • A separate technical services agreement will see MP Materials support Ma'aden in preparing the bankable feasibility study for the new rare earth processing facility in the Kingdom (company filing).
  • The binding term sheet, covering these proposed transactions, is set to remain in effect until 31 March 2027 unless otherwise agreed by the parties (company filing).

Valuation Changes

  • The Fair Value Estimate has risen moderately from SAR 60.00 to SAR 71.80.
  • The Discount Rate has increased slightly from approximately 20.05 percent to about 20.78 percent, reflecting a marginally higher perceived risk or required return.
  • The Revenue Growth Assumption has edged down slightly from around 5.50 percent to about 5.15 percent.
  • The Net Profit Margin Assumption has improved slightly from roughly 25.19 percent to about 26.02 percent.
  • The Future P/E Multiple has increased moderately from about 41.4x to roughly 45.8x, indicating a higher expected valuation relative to earnings.

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