Could the Lynas share price have another 15% upside from here?

The Lynas Rare Earths Ltd (ASX: LYC) share price gained 3.72% in today’s trading session.

Shares of the rare earths producer ended the day at $8.64 each.

Lynas’s share price could have received a boost by movements of the materials sector, which was the best-performing sector on the ASX on Tuesday.

The S&P/ASX 200 Materials Index (ASX: XMJ) finished 2.64% higher. For comparison, the S&P/ASX 200 Index (ASX: XJO) closed up 1.65%.

Meanwhile, a few of Lynas’s peers also received a boost this afternoon. Here’s a look at how these companies performed:

• BlueScope Steel Limited (ASX: BSL) up 2.73%
• Incitec Pivot Ltd (ASX: IPL) up 2.4%
• OZ Minerals Limited (ASX: OZL) up 0.58%

So while Lynas’s share price movement could arguably be chalked up to movements by the broader market, there is also some evidence to suggest that the company could have as much as a 15% upside in the future.

This is according to a broker note published by UBS this afternoon. So let’s cover what the broker said as well as some other expert commentary the company has received in the recent past.

Experts think Lynas shares could be on the rise

A UBS broker gave Lynas shares a price target of $9.95 as well as a buy rating on Tuesday, thus warranting the 15% potential upside.

One expert, BW Equities salesperson Tim Bleakley, agrees with the broker that Lynas could be ripe for the picking.

As the Fool reported earlier today, Bleakley praised Lynas’s outlook, FY22 result, and crucially the fact that it’s one of the few rare earth producers outside of China.

As an aside from Bleakley’s comments, China’s mounting aggression towards Taiwan could make rare earth producers outside of China such as Lynas and Arafura Resources Limited (ASX: ARU) much more valuable to the world economy as geopolitical tensions escalate.

This is according to comments contained in Arafura’s most recent quarterly activities report in which its geographics were stated as being one of its key advantages.

On a different note, Lynas expects strong demand for its neodymium and praseodymium output in the future. This is despite its quarterly sales revenue falling 44% in its quarterly activities report for Q1 FY23.

Lynas share price snapshot

The Lynas share price is down 16% year to date but up 14% over the past year.

Meanwhile, the ASX 200 is down around 7% and 6% over the same periods.

The company’s market capitalisation is around $7.53 billion.

The post Could the Lynas share price have another 15% upside from here? appeared first on The Motley Fool Australia.

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More reading

• 2 ASX companies producing minerals the whole world wants: expert
• Here are the top 10 ASX 200 shares today
• Why Champion Iron, Lynas, Newcrest, and Sayona shares are storming higher
• Lynas share price jumps despite 44% revenue fall
• Is the Lynas share price a buy ahead of tomorrow’s update?

Motley Fool contributor Matthew Farley 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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