Lynas Rare Earths Ltd (ASX: LYC) shares are a popular option to gain exposure to the rare earths industry.
But with the rare earths giant's shares up more than 100% over the past 12 months, the near-term upside from here could be limited.
That doesn't mean there isn't potential for big returns elsewhere in the industry.
For example, Bell Potter expects the stock in this article to rocket materially higher from current levels.
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Which ASX rare earths stock?
The stock that Bell Potter is tipping to rise strongly is American Rare Earths Ltd (ASX: ARR).
It holds a 100% interest in the subsidiary Wyoming Rare USA (WRI), which owns the Halleck Creek project in Wyoming, United States. The Cowboy State Mine (CSM) forms Phase 1 of the development at Halleck Creek.
Bell Potter highlights that CSM is located on State of Wyoming land, which carries advantages from expedited permitting process (~2-3 years vs +10 years on Federal Land). The current mineral resource estimate (MRE) for CSM is 547Mt at 3,344ppm total rare earth oxides (TREO) for contained metal of 1,831kt.
What is the broker saying?
The broker has been pleased with the progress the ASX rare earths stock is making and believes the next 6 to 12 months should make project delivery timelines clearer. It said:
Halleck Creek remains one of the larger and more advanced rare earth development assets in the U.S., with strategic exposure to both magnet rare earths and heavy rare earths. ARR continues to make tangible progress on several fronts that should help de-risk Halleck Creek and improve strategic positioning within the developing U.S. mine-to-magnet rare earth supply chain.
The key takeaway from the March Quarter was not just continued technical progress, but the increasing focus on execution, particularly around pilot-scale processing, downstream flowsheet development and broader development planning. These steps should support a clearer pathway toward project delivery over the next 6–12 months.
Big potential returns
According to the note, the broker has retained its speculative buy rating and 65 cents price target on the company's shares.
Based on its current share price of 37 cents, this implies potential upside of 75% for investors over the next 12 months.
Commenting on its speculative buy recommendation, Bell Potter said:
We retain our Speculative Buy recommendation and $0.65/sh valuation. ARR is progressively de-risking Halleck Creek through pilot plant work, feasibility advancement, downstream studies and increased alignment with U.S. critical minerals policy settings. Success across these key catalysts and macro rare earth tailwinds represents the clearest path to compressing the risk discount and providing valuation uplift.
Overall, if you missed the boat on Lynas shares, then Bell Potter thinks this ASX rare earths stock could be worth considering. However, only if you have a high tolerance for risk.
