Why are Lynas shares getting hammered on Wednesday?

Lynas Rare Earths Ltd (ASX: LYC) shares are taking a beating today.

Shares in the S&P/ASX 200 Index (ASX: XJO) rare earths miner closed yesterday trading for $15.96. In morning trade on Wednesday, shares are changing hands for $15.04 apiece, down 5.8%.

For some context, the ASX 200 is up 0.1% at this same time.

This follows the release of Lynas’ fourth-quarter update (Q4 FY 2024).

Investor expectations appear to be high after the strong run higher in Lynas shares over the past year. Despite today’s pullback, the share price remains up 48.6% in 12 months.

Here’s what’s happening.

Lynas shares tumble despite surging revenue

The ASX 200 rare earths stock is under selling pressure despite reporting some solid results.

For the three months to 30 June, Lynas recorded gross sales revenue of $288.9 million, up 69.7% year on year. That marks the miner’s highest quarterly revenue since Q4 FY 2022.

Sales receipts of $297.1 million were up 94.6%.

Revenue was boosted by a material increase in the average selling price across all the company’s rare earth products, which hit a record $98.2 per kilogram over the quarter. Management credited improved NdPr (Neodymium-Praseodymium) pricing, an increased mix of heavy rare earth sales, and increased premiums over the market index.

The quarter saw Lynas produce 3,481 tonnes of total rare earth oxide (REO), up 8% from the prior corresponding quarter. But Lynas shares could be facing some pressure with NdPr production of 1,857 tonnes, down 11% year on year.

Over the quarter, Lynas’ CAPEX, exploration, and development costs totalled $27.8 million.

Turning to the balance sheet, as at 30 June, Lynas held $1.21 billion in cash and short-term deposits, up more than 600% year on year.

What did management say?

Commenting on the results that have yet to lift the Lynas share price today, interim CEO Pol Le Roux said:

The June quarter 2026 saw the continued focus on the efficient operation of our A$1.5 billion investment in new capacity which was completed as part of the Lynas 2025 growth initiative. This includes the ramp up of the expanded Mt Weld processing plant and addressing bottlenecks at the Kalgoorlie Rare Earths Processing Facility.

Le Roux also pointed to the growth potential on offer from Lynas’ Samarium oxide operations.

He noted:

Following production of the first Samarium oxide in March 2026, we have received strong customer demand and the customer qualification process is underway. Samarium is used in high performance magnets for electronics and aerospace as well as optical, catalyst and medical applications. The first customer orders are expected to be fulfilled in the current quarter (Q1 FY27).

The post Why are Lynas shares getting hammered on Wednesday? appeared first on The Motley Fool Australia.

More reading

• Lynas Rare Earths: June quarter earnings break records
• 5 things to watch on the ASX 200 on Wednesday
• 7 ASX 200 shares given buy ratings this week
• 13 ASX 200 shares that doubled in value in FY26
• Lynas Rare Earths inks $50m deal for new Malaysian magnet factory

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Lynas Rare Earths Ltd. 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.