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

One broker believes the rare earths producer could have a substantial upside.

| More on:
A young woman holds her hand to her mouth in surprise as she reads something on her laptop.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Amid the broker giving Lynas a healthy price target and a buy rating, other experts also agree the company holds potential
  • One key reason is that Lynas is one of the few rare earth producers outside of China
  • Geopolitical tensions as well as the strong outlook for its produce could help stabilise its share price higher

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.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 30 April 2025

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.

More on Resources Shares

Miner looking at a tablet.
Resources Shares

Up 73% since April, why Mineral Resources shares could keep charging higher

A leading expert says that Mineral Resources shares remain ‘heavily undervalued’. But why?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Resources Shares

Guess which ASX 200 mining stock is sinking 7% following its quarterly update

Let's see how this miner performed during the third quarter.

Read more »

Miner looking at a tablet.
Resources Shares

What's the latest broker ratings on BHP shares?

There's an air of caution floating about BHP shares even with bullish ratings.

Read more »

A young African mine worker is standing with a smile in front of a large haul dump truck wearing his personal protective wear.
Resources Shares

BHP shares last traded at $50 in 2023. When will they get back there?

Let’s dig into the potential for BHP shares to rise.

Read more »

Man with rocket wings which have flames coming out of them.
Share Gainers

Guess which ASX All Ords stock just rocketed 21% on 'exceptional' results

Investors are sending the ASX All Ords stock flying higher on Wednesday. But why?

Read more »

A mature age woman with a groovy short haircut and glasses, sits at her computer, pen in hand thinking about information she is seeing on the screen.
Resources Shares

Guess which prominent Super fund just offloaded its remaining Mineral Resources shares?

This super fund has had enough.

Read more »

Image from either construction, mining or the oil industry of a friendly worker.
Resources Shares

Broker names 10 ASX mining stocks set to outperform following Macquarie Conference

Twenty-two ASX mining companies presented at the annual Macquarie Conference last week.

Read more »

Miner holding cash which represents dividends.
Dividend Investing

Invested $8,000 in Fortescue shares 5 years ago? Guess how much passive income you've banked!

Fortescue is popular among passive income investors for paying two fully franked dividends per year, even during COVID.

Read more »