The Lynas Rare Earths Ltd (ASX: LYC) share price has soared in May, but could it go even higher in June?
The rare earth producer's share price has jumped nearly 10% from $8.96 at market open on 2 May to its closing share price of $9.85 on Tuesday. In contrast, the S&P/ASX 200 Index (ASX: XJO) has dropped 3% over the same time frame.
So what is the outlook for the Lynas share price?
Positive outlook
Lynas is exploring and processing rare earth minerals at the Mt Weld project in Western Australia. The company also has a refining facility in Malaysia.
One analyst has suggested Lynas is the "sweet spot of decarbonisation" and rated the company as a buy in early May. Alphinity Investment Management principal Stephane Andre said:
Lynas is the one I'm proposing, which is a buy for me. It is really at the sweet spot of decarbonisation and geopolitical diversification. So when you think about decarbonisation, rare earth is really critical for wind turbines, electric vehicles and so on.
As my Foolish colleague Bernd reported, Lynas is the only large rare earths producer outside of China.
In the first quarter of 2022, Lynas reported record Neodymium-Praseodymium (NdPr) production of 1,687 tonnes. The company also achieved record sales revenue of $327.2 million.
Another broker that has recently recommended Lynas shares is Canaccord. Amid ASX mining share volatility, its analysts recommend investing in sector leaders with "robust balance sheets" and earnings growth in the near term. The team added:
…particularly those with leverage to attractive long-term supply/demand fundamentals such as Allkem, Lynas Rare Earths, and Oz Minerals.
In early May, Macquarie also placed an outperform rating on the company's shares with a $12.80 price target. As my Foolish colleague James reported, Macquarie likes Lynas' boost in production and is optimistic it could experience strong growth in FY 2023.
Share price snapshot
The Lynas share price has surged by more than 78% in the past year but has fallen around 3% in the year to date.
For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned less than 1% in the past year.
Lynas has a market capitalisation of about $8.9 billion based on today's share price.
