The Lynas Rare Earths Ltd (ASX: LYC) share price is charging higher today despite no new announcements from the company.
At the time of writing, the rare earths producer's shares are up 4.71% to $7.68.
For context, the S&P/ASX 200 Materials Index (ASX: XMJ) is one of the best performers on the ASX today. The sector is up 2.74%.
Image source: Getty Images
What's giving rise to Lynas shares?
After the Lynas share price hit a year-to-date low of $7.28 yesterday, investors are taking advantage of the recent weaknesses.
This comes amid the ASX staging a comeback despite macro-environmental headwinds still in the midst.
Notably, the recent lift in neodymium-praseodymium (NdPr) prices is likely also supporting investor confidence in the company's shares.
In the past two weeks, the price of NdPr has been trending upwards to post a gain of around 10%.
Lynas is considered the world's second-largest producer of NdPr, behind China, which accounts for 60% of global production of rare earths.
These deposits comprise a group of 17 metals that are critical to the manufacturing of many electronic products. This includes mobile smartphones, electric vehicles, aircraft engines, and wind turbines, as well as military hardware.
What do the brokers think?
A couple of brokers weighed in after the company announced water supply disruption issues affecting production at its Malaysia plant.
According to ANZ Share Investing, analysts at Macquarie cut their price target by 2% to $9.30 per share. Based on the current Lynas share price, this implies an upside of around 20%.
Clearly, the broker believes there is still significant value in the miner despite the short-term problems.
On the other hand, Ord Minnett had a more bearish tone, slashing its 12-month rating by 1% to $4.80. This represents a downside of almost 40% from where Lynas trades today.
Lynas share price snapshot
Over the past 12 months, the Lynas share price has gained 15%.
Year-to-date, however, the share is down 25% on the back of market volatility.
Lynas has a price-to-earnings (P/E) ratio of 12.67 and commands a market capitalisation of approximately $6.63 billion.
