It was a very bumpy ride for the S&P/ASX 200 Index (ASX: XJO) this Tuesday. After a strong start this morning, the ASX 200 closed 0.07% lower. But the Lynas Rare Earths Ltd (ASX: LYC) share price must be wishing it was so lucky.
Lynas shares had a Tuesday shocker. The rare earths producer finished down 3.3%, putting the company's share price at $9.39. It was even worse for Lynas earlier this morning though, with the company descending as low as $9.31 a share.
So why did Lynas cop such a nasty sell-off this session?
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Why is the Lynas share price getting dumped today?
Well, the first thing to note is that most ASX 200 materials shares had a pretty nasty day, so it wasn't just Lynas getting a belting.
Take the Pilbara Minerals Ltd (ASX: PLS) share price. It closed 5% lower. Core Lithium Ltd (ASX: CXO) was a little worse at 5.69%. And Sayona Mining Ltd (ASX: SYA) was smashed, shedding 11.86%.
So it was always going to be hard for Lynas shares to do well when investors seemingly didn't want a bar of its entire sector.
But we also have another factor to consider.
According to reporting in The Australian today, broker JP Morgan has cut its rating on Lynas shares to 'underweight'. The broker now has a 12-month share price target of $8.60 on the company's shares.
If JP Morgan is on the money, this would represent a downside of just over 9% from the current price over the next year.
So that might also have been playing on investors' minds today.
But we do have to take today's share price drop with a pinch of salt. It was only yesterday that Lynas released its latest quarterly production results. The company impressed investors with a 42% quarter-on-quarter revenue rise to $232.7 million, with production of rare earth oxide up 27%.
This saw the Lynas share price rise a healthy 6.94% yesterday. So even after today's fall, Lynas is still well ahead of where it ended last week. That's something for investors to keep in mind today.
