Why NioCorp Developments Stock Was Bumping Higher on Monday

A clutch of stock investors were obviously considering critical materials company NioCorp Developments (NASDAQ: NB) to be critical for their portfolios on Monday. Following an analyst's price target increase, they bought into the stock, which was propelling it to an over 2% gain in late-session trading that day.

A positive change from an analyst

That morning, H.C. Wainwright's Heiko Ihle made a significant upward adjustment to his NioCorp fair value assessment. He now believes the mining stock could reach $9.50 per share, significantly higher than his previous price target of $8.25. In making the change, he maintained his buy recommendation.

Image source: Getty Images.

Ihle's move was made shortly after the company hosted two town hall events near its Elk Creek mine in Nebraska last Friday. According to reports, the analyst wrote that the one he attended featured a speech from the state's governor, Jim Pillen, and a long community question-and-answer session in which every question had been addressed.

Ihle added that the price target raise was due to an increase in its net asset value multiple. This, in turn, is due to the popularity of the rare-earth materials in which NioCorp aims to develop, as well as its satisfactory level of liquidity on hand.

Promising potential

Any company that can successfully develop rare-earth assets in this country stands to do extremely well. After all, the vast bulk of them are mined and processed abroad (mainly in China). This is one reason why NioCorp's shares spiked recently. To me, the subsequent pull-back is making them look rather attractive at the moment, given the company's very high potential.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.