The All Ordinaries Index (ASX: XAO) is highly unlikely to rocket 123% in the next 12 months, but All Ords ASX rare earths stock Meteoric Resources (ASX: MEI) just may.
That's according to the team at Macquarie Group Ltd (ASX: MQG).
In a new report, Macquarie maintained its outperform rating on Meteoric Resources following the miner's quarterly update last Friday.
That's despite the Meteoric Resources share price plunging 15.2% on Monday. Shares are down another 10.3% in late morning trade today, changing hands for 17.5 cents apiece.
This week's sharp selling for the All Ords ASX rare earths stock comes amid a potential détente in the US-China trade war. Officials are now flagging that China may delay its threatened new export controls on rare earths.
However, Macquarie doesn't expect these "near term market volatilities" to derail Meteoric Resources exceptional growth potential.
According to the broker:
U.S. Treasury Secretary Bessent said recently that he anticipates that China will delay its expanded licencing regime for rare earths by a year. While this could weigh on REE producers given the market sentiment shift, we believe the investment case for MEI is unchanged.
Amid this week's selling, it's also worth remembering that on 3 April you could have picked up Meteoric Resources share for 6.0 cents apiece. That would see you sitting on a gain of 191.2% today.
Why this All Ords ASX rare earths stock could storm higher
Macquarie's bullish outlook is pinned to Meteoric Resources' Caldeira Rare Earth Project, located in Brazil.
In the September quarter, the miner completed a Pre-Feasibility Study (PFS), which its said "confirmed a world-class, long-life project".
The Caldeira Project has a Probable Ore Reserve of 103 million tonnes at 4,091 parts per million (ppm) Total Rare Earth Oxide (TREO).
The All Ords ASX rare earths stock is also nearing completion of the pilot plant construction, with commissioning expected in November. This will then deliver continuous mixed rare earth carbonate (MREC) production. Rare earth oxide separation will also be included as part of the pilot plant.
Meteoric Resources managing director Stuart Gale said on Friday:
The volume and quality of drilling, geological data, metallurgical test work and engineering studies positions us to advance development of Caldeira Project to meet increasing demand and diversification of the rare earth supply chain.
The company's balance sheet is also in solid shape.
Macquarie noted:
An A$42.5m placement was completed in July, with a 3.3% discount to the 10-day VWAP, supported by the strong market sentiment. MEI finished the quarter with cash balance of A$44.4m.
Macquarie left its price target for the ASX rare earths stock unchanged at 39 cents per share.
That represents a potential upside of 122.9% from current levels.
