The Lynas Rare Earths Ltd (ASX: LYC) share price has surged around 50% over the past six months. Could shares in the miner keep rising?
A rare earths miner, Lynas is the world's second-largest producer and the only significant separated rare earths producer of scale outside China.
Lynas explains that rare earths are essential inputs to high-growth global manufacturing supply chains, including 'digital age' and green technologies such as electric vehicles and wind turbines.
Its products include neodymium and praseodymium (NdPr), lanthanum, cerium and mixed heavy rare earths.
What's happened to the Lynas share price lately?
Lynas shares have soared in the first half of 2022 as the company saw a jump in revenue and net profit after tax (NPAT). In the FY22 first half, revenue increased from $202.5 million to $314.8 million and NPAT went up from $40.6 million to $156.9 million.
Lynas CEO and managing director Amanda Lacaze said the company had benefited from the "continued buoyancy of the market and strong customer demand for a sustainable supply of rare earths".
In November 2021, the NdPr market price rose above US$100 per kilo for the first time since 2011.
The company said that its customers expected demand would "grow strongly" as FY22 continues. The company was positioned to meet accelerating demand through its 'Lynas 2025' growth projects.
This includes investment in its Mt Weld resource, constructing a Kalgoorlie rare earths processing facility and a Malaysian permanent disposal facility for water leach purification residue.
Could it keep rising?
Brokers are mixed on the Lynas share price.
On the positive side is Macquarie, which has a rating of 'outperform' on the rare earth ASX mining share.
The broker thought the HY22 result was good and noted that rare earth prices have jumped. This could help Lynas shares.
Macquarie's price target on Lynas is $12.60, suggesting a possible rise of almost 30% over the next year.
But Ord Minnett has a different opinion on the miner. Its rating is 'lighten' and the Lynas share price target, for now, is $4.50. That implies a potential decline of approximately 50% due to expected higher spending and doubts about the longevity of high rare earth prices.
Lynas share price valuation
According to Macquarie, the Lynas share price is valued at 12x FY23's estimated earnings.
Ord Minnett's numbers show that the Lynas share price is valued at 23x FY23's estimated earnings.
