Lynas share price storms 5% higher: Can it keep rising?

The Lynas Rare Earths Ltd (ASX: LYC) share price was a strong performer on Tuesday.

The rare earths producer’s shares ended the day 5% higher at $8.14.

Why is the Lynas share price rising?

Investors were bidding the Lynas share price higher today after investors flooded back into the market again following several tough sessions.

This led to the ASX 200 index rising a sizeable 1.2% on Tuesday with the S&P/ASX 200 Resources index doing a lot of the heavy lifting with its gain of 2.6%.

Can its shares keep rising?

One leading broker believes the Lynas share price still has plenty of upside ahead.

According to a recent note out of Goldman Sachs, its analysts only have a neutral rating on its shares but their price target of $9.10 is meaningfully higher than current levels.

In fact, this price target implies potential upside of almost 12% for investors over the next 12 months.

Goldman commented:

NdPr market to remain in deficit beyond 2025 based on our NdPr SD model incorporating our global 2030 wind & EV targets and ex-China mine supply forecasts. Current NdPr spot China is ~US$93/kg

Upsized LYNAS 2025 target (12ktpa NdPr) but at higher capex of ~A$1.4bn, where we continue to see execution and capex risks. US gov refinery deals for construction of a light rare earth (LRE) plant (~50% of total ~US$60mn cost) and commercial Heavy Rare Earths (HRE) separation facility (100% of total US$120mn cost) are incremental, where we expect the direct sale of ~0.5ktpa of high value HRE (mostly Dy & Tb) to US customers likely improves realised HRE pricing.

We see the stock as fairly valued at A$8.25/sh on a DCF basis (~1.1x NAV) based on our long run US$80/kg (real $, from 2026) NdPr price forecast.

As covered here, Goldman prefers Iluka Resources Limited (ASX: ILU) for rare earths exposure.

The post Lynas share price storms 5% higher: Can it keep rising? appeared first on The Motley Fool Australia.

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More reading

• Lynas share price tumbles again, down 10% this week
• The Lynas share price is sinking 5% amid market mayhem
• Why is the Lynas share price so volatile on Tuesday?
• Down 20% in 2022, is the Lynas share price too cheap to ignore?
• Why is the Lynas share price surging higher on Tuesday?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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