Texas Capital Securities Initiates USA Rare Earth Buy
The firm set a $28 price target as USA Rare Earth works to scale domestic magnet manufacturing by 2028.
Updated on Oct. 22, 2026 in Corporate Finance
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Texas Capital Securities initiated stock coverage of USA Rare Earth with a Buy rating and a $28 price target. The company is currently developing a domestic magnet production facility in South Carolina while mineral exploration continues at its Texas site.
Why it matters
Investors are weighing the company's long-term production potential against its current reliance on metal-making revenue, as the firm works toward 2028 commissioning goals for its new facility.
USA Rare Earth faces project milestones to unlock up to $1.3 billion in Federal Financing Bank advances, while federal agreements cap direct awards at $277 million. The company reported zero revenue from mineral production or magnet manufacturing for the six months ended June 30.
The players
Texas Capital Securities
An investment firm that provides equity research and financial analysis for industrial and commodity markets.
USA Rare Earth
A developer of domestic rare earth mineral extraction and magnet manufacturing infrastructure.
Commerce Department
A federal agency that facilitates industrial policy through direct awards and financing guarantees for strategic sectors.
The details
USA Rare Earth's current business model relies on metal-making operations, even as the company scales capital-intensive infrastructure to eventually produce magnets. The firm broke ground on its South Carolina facility on September 9, 2026, which acts as a pivot point for transitioning from exploration to domestic supply chain manufacturing. Future scalability depends on meeting federal conditions to secure financing for the facility's 2028 commissioning.
Timeline
June 30, 2026: Round Top mineral project remained in the exploration stage.
September 9, 2026: Ground was broken for the Blacksburg, South Carolina facility.
2028: Targeted commissioning timeframe for the South Carolina metal and magnet plant.
Market Landscape
USA Rare Earth's financing model follows the pattern established by the Defense Production Act to incentivize domestic critical mineral production through federal guarantees. This strategy highlights the intense capital requirements currently facing firms attempting to localize magnet manufacturing.
Operators in the industrial supply chain should monitor the company's ability to clear specific federal project milestones, as these directly dictate capital access. The 2028 facility commissioning deadline serves as a critical proxy for the broader commercial viability of domestic magnet production.
The takeaway
The move by Texas Capital Securities highlights the shift toward valuing companies based on future federal-backed infrastructure rather than current mineral output. Investors and supply chain managers should track the company's project milestones as the primary indicator for future manufacturing capacity.
Further reading
For additional context on domestic manufacturing investments, see Corporate Finance.
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