This analyst just raised his price target on Neo Performance Materials

Paradigm Capital analyst J. Marvin Wolff has raised his price target on Neo Performance Materials (Neo Performance Materials Stock Quote, Chart, News, Analysts, Financials TSX:NEO)to $31.00 from $26.00, maintaining a “Buy” rating, citing improving earnings visibility and long-term upside tied to its NARVA magnet facility.

Wolff said Neo’s fourth-quarter and full-year 2025 results reinforce its position as a leading Western producer of rare earth magnet materials, with a clear path to higher profitability. He said the company’s growth profile, particularly through its NARVA project, supports a valuation rerating.

“The opening of the NARVA sintered magnet plant we believe is a watershed moment for NEO,” he said in his March 19 report.

Neo reported Q4 revenue of $120.3-million and EBITDA of $20.4-million, above Wolff’s $15.8-million estimate, while adjusted earnings came in at $0.01 per share after accounting for $7.1-million in NARVA start-up costs. For full-year 2025, the company generated revenue of $478.8-million and EBITDA of $75.6-million, both ahead of expectations.

Management guided to 2026 EBITDA of $75-million to $80-million, above Street estimates, with Wolff pointing to NARVA as a key driver of future growth. He estimates the project could generate $45-million to $56-million in EBITDA by 2029, contributing to total company EBITDA of more than $120-million, with further upside beyond 2030 as additional phases come online.

Wolff said Neo is well-positioned to benefit from long-term demand trends, including electric vehicles and wind energy, despite near-term variability in EV demand in Western markets. He added that the company’s balance sheet remains solid, with modest leverage and sufficient liquidity to fund its capital plans.

He also noted Neo’s strategic positioning could make it an attractive acquisition target, given its rare earth processing capabilities and exposure to Western supply chains.

Wolff now applies a 12-times EV/EBITDA multiple, up from 10-times previously, reflecting improved growth visibility and market positioning.

The analyst forecasts Neo will generate Adjusted EBITDA of $76.9-million on revenue of $519.7-million in fiscal 2026, improving to $94.6-million on revenue of $582.5-million in 2027.

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