Up 29% in a year, are Lynas shares still a good buy today?

A leading expert delivers his verdict on the outlook for Lynas shares.

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Lynas Rare Earths Ltd (ASX: LYC) shares are pushing higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) rare earths miner closed yesterday trading for $8.14. In afternoon trade on Tuesday, shares are changing hands for $8.21 apiece, up 0.9%.

This sees Lynas shares up a market-beating 28.9% since this time last year.

For some context, the ASX 200 is just about flat today, with the benchmark Aussie index up 10.7% over 12 months.

But with the rare earths miner having delivered almost three times the one-year gains as the ASX 200, is it too late to buy shares today?

Should I buy Lynas shares today?

Sequoia Wealth Management's Peter Day recently ran his slide rule across the ASX 200 mining stock (courtesy of The Bull).

"Lynas is the only significant rare earths producer outside China," Day said. "Apart from the Lynas Mt Weld mine in Western Australia, Lynas also operates a rare earths processing plant in Kalgoorlie and another in Malaysia."

Explaining why he currently has a sell recommendation on Lynas shares, Day said, "We see a limited near-term earnings contribution from production."

He added:

Gross sales revenue of $123 million in the third quarter of fiscal year 2025 was down from $141.2 million in the second quarter. Third quarter sales revenue in 2025 was up from $101.2 million in the prior corresponding period.

And with Lynas shares up strongly this year, Day concluded, "We have downgraded LYC on valuation grounds. The shares have risen from $6.53 on January 2 to trade at $8.41 on July 3. Investors may want to consider cashing in some gains."

What's the latest from the ASX 200 rare earths miner?

The last price-sensitive news for Lynas shares was the company's third-quarter results update, which Day referred to above. That update was released on 28 April.

Among the highlights grabbing ASX investor interest was the commissioning of Lynas' new Heavy Rare Earth separation circuit. Once that's fully up and running, the ASX 200 miner will be the only commercial producer of separated Heavy Rare Earth products outside China.

With politics being what they are today, you can see how that could be a major pending accomplishment.

"This is an exciting development for Lynas and our customers and sets Lynas apart as the only commercial producer of separated Heavy Rare Earth products outside China," Lynas CEO Amanda Lacaze said at the time.

"In recognition of the importance of these products in supply chain resilience, Lynas has engaged with target customers," she added.

Lynas shares closed up 3.3% on the day the quarterly results were released.

Motley Fool contributor Bernd Struben 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.

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