Cavendish Initiated Buy Rating for Mkango
The broker set a target price of 110p for the rare earth magnet recycling firm.
Updated on Sept. 29, 2026 in Stock Picks
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Cavendish has initiated coverage of Mkango Magnetic Materials with a buy rating, citing significant potential in its recycling operations. The analyst set a price target of 110p, representing a 166% implied upside from the 41.4p share price on September 29, 2026.
Why it matters
This move highlights investor interest in the scalability of rare earth magnet recycling technologies as global supply chains shift. The firm is banking on infrastructure expansion and a $20 million funding injection to drive future profitability.
Cavendish projects revenue to grow from $15.5 million in 2027 to $98.3 million by 2029, with adjusted EBITDA shifting from a $2.8 million loss to a $44.2 million profit. The firm estimates an annualized EBITDA of $60 million by 2031.
The players
Cavendish
This is a brokerage firm that provides investment research and financial analysis on various companies.
Mkango Magnetic Materials
The company operates as a rare earth magnet recycling group focused on commercializing new recovery technologies.
HyProMag
This subsidiary utilizes patented hydrogen processing technology to recover high-quality alloy powder from scrap magnets.
University of Birmingham
The institution provides equipment and infrastructure essential for Mkango's UK-based recycling facility operations.
The details
Mkango Magnetic Materials utilizes patented Hydrogen Processing of Magnet Scrap technology via its HyProMag subsidiary to recover alloy powder. The company is currently scaling facilities in the UK and Germany while targeting magnet production through a United States joint venture.
Timeline
29 September 2026: Cavendish issued the note on share pricing.
End of 2026: The firm expects a $20 million funding injection.
First half of 2027: The US joint venture targets first magnet production.
2028: The US joint venture aims to begin integrated recycling.
2031: The company estimates reaching $60 million in annualized EBITDA.
Market Dynamics
The transition toward circular economies in critical minerals relies on the adoption of Hydrogen Processing of Magnet Scrap technology to replace traditional chemical separation methods. This operational pivot positions the company to capitalize on the secular growth of magnet recycling amid tightening global raw material supplies.
Retail investors should note the high projected growth coupled with the inherent risks of a company moving from a cash-flow negative status to profitability. The reliance on significant future funding and successful facility scaling makes this a speculative equity play.
The takeaway
The brokerage forecast underscores the potential for rare earth magnet recycling to become a profitable industrial sector over the next five years. Investors should monitor the company's ability to secure its planned $20 million funding and meet its 2027 commercial production milestones.
Further reading
For more analysis on market valuations and equity research, explore the Stock Picks section.
Source note: This article includes information reported by Proactiveinvestors NA.
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