It was a tough start to the week for the S&P/ASX 200 Index (ASX: XJO). Australia's benchmark index dipped 1.5% yesterday to hit a new seven week low.
However it wasn't all doom and gloom.
Several ASX materials stocks shot higher, including:
- Lynas Rare Earths Ltd (ASX: LYC) up 5%
- Elevra Lithium (ASX: ELV) jumped 5%
- Brazilian Rare Earths (ASX: BRE) climbed almost 10%.
These companies have now all doubled in the last 12 months.
Let's see what was behind the strong start to the week for these ASX materials stocks, and if there is more upside.
Image source: Getty Images
Brazilian Rare Earths rockets on expansion news
Brazilian Rare Earths operates as a mineral exploration company. It focuses on the discovery and development of mineral resources in Brazil.
Following yesterday's impressive 10% rise, it is now up more than 200% in the last two years.
Investors were gobbling up this ASX materials stock yesterday after it announced the spin-off of its aluminium business.
Brazilian Rare Earths plans to demerge its Amargosa bauxite and gallium project into a new company through an initial public offering worth up to $50 million.
The company said the move separates two large-scale, strategically important mineral platforms with different development pathways.
At the time of writing, this ASX materials stock is trading for approximately $5.87.
However in good news for prospective investors, experts are tipping more upside, including an $8 price target from Canaccord.
This target is still 36% higher than current levels.
Lynas still has upside
Lynas is primarily involved in the exploration, development, and processing of rare earth minerals in Australia and Malaysia.
It sits at the centre of a critical supply chain: rare earth magnets.
These are used in electric vehicles, wind turbines, and advanced electronics.
It is one of the few major rare earths producers outside China, which has helped it benefit from geopolitical concerns around supply security and diversification.
After yesterday's 5% rise, it is now up 150% in the last 12 months and closed yesterday at $18.93.
However 15 analyst forecasts via TradingView have an average price target of $22.45 on this ASX materials stock – indicating a further 18% upside.
Elevra Lithium can keep rising
Elevra is an emerging lithium producer focused on sourcing and developing the raw materials needed to construct lithium-ion batteries, primarily lithium and graphite.
Like many lithium shares, it has benefited from surging oil costs, which has reignited the appeal for alternative energy sources.
After yesterday's rise, it is now up 380% in the last year.
According to analyst forecasts via TradingView, it has another 30% upside to reach fair value.
