The Lynas Rare Earths Ltd (ASX: LYC) share price has struggled since mid-August, but what do analysts predict for the company?
Lynas shares have descended more than 20% since market close on 17 August and are currently trading at $8.05 apiece. For perspective, the S&P/ASX 200 (ASX: XJO) has fallen 4% over the same time frame.
Let's check the outlook for the Lynas share price.
What's ahead?
Lynas is exploring rare earths Neodymium and Praseodymium (NdPr) at the Mt Weld Project in Western Australia. The company also operates a rare earths processing plant in Malaysia.
Ord Minnett senior investment advisor Tony Paterno is recommending investors sell Lynas Rare Earths shares.
Paterno highlighted Lynas' recent water supply issues at its Malaysian processing plant. Lynas reported to the market on 13 September the disruption is "affecting production".
Commenting on his outlook for the Lynas share price on The Bull, Paterno said:
We have lowered fiscal year 2023 production forecasts by 8 per cent. We have reduced our EBITDA forecasts by 13 per cent. In our view, the current risk/reward remains unattractive.
In June, Lynas received a $120 million US government contract for the establishment of heavy rare earths separation facility in Texas. It's targeting production to begin in financial year 2025. As well, Lynas is also constructing a processing facility in Kalgoorlie.
However, another broker is more optimistic on Lynas shares. The team at Macquarie recently lifted the Lynas outlook to outperform with a $9.40 price target. That's a nearly 17% upside on the current share price at the time of writing.
Share price snapshot
Despite a tough run year to date, the Lynas share price has risen 27% in the past 52 weeks.
For perspective, the ASX 200 has fallen nearly 6% in the past year.
Lynas has a market capitalisation of about $7.2 billion based on the current share price.
