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Lynas Rare Earths Limited (AU:LYC)
ASX:LYC

Lynas Rare Earths Limited (LYC) AI Stock Analysis

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AU

Lynas Rare Earths Limited

(Sydney:LYC)

59Neutral
Lynas Rare Earths Limited's overall stock score reflects a balance between financial challenges and technical momentum. While financial performance is currently weak, with declining margins and cash flow issues from high capital expenditures, the technical indicators suggest positive stock momentum. Valuation concerns arise from a high P/E ratio, but the earnings call provides some optimism with production improvements and market recovery signs. The combined factors indicate a cautious outlook with potential for recovery if financial performance improves.
Positive Factors
Production Expansion
The Mt Weld expansion project is on track for completion, which will support production growth.
Project Development
Lynas successfully commissioned the dewatering circuit, the first phase of Mt Weld expansion.
Negative Factors
Earnings Performance
Sales and revenue for the quarter were below expectations, partly due to deferred production and lower pricing.
Market Demand
Continued weakness in macro is anticipated given weak China demand and extended lunar new year celebrations.
Valuation Concerns
Lynas Rare Earths Ltd. has been downgraded to Neutral from Buy due to valuation concerns.

Lynas Rare Earths Limited (LYC) vs. S&P 500 (SPY)

Lynas Rare Earths Limited Business Overview & Revenue Model

Company DescriptionLynas Rare Earths Limited (LYC) is a leading integrated producer of rare earths, operating primarily in the mining and processing sectors. The company is headquartered in Australia and engages in the extraction and refining of rare earth elements, which are critical components in various high-tech and green technology applications. Lynas is recognized for its significant resources and capabilities in producing essential materials like neodymium, praseodymium, and other rare earth products that are pivotal for the development of electronics, automotive, and renewable energy industries.
How the Company Makes MoneyLynas Rare Earths Limited generates revenue primarily through the sale of rare earth materials extracted from its mining operations and processed through its advanced refining facilities. The company's key revenue streams include the production and sale of rare earth oxides, which are utilized in the manufacturing of permanent magnets, catalysts, and other high-tech applications. Lynas benefits from strategic partnerships and long-term contracts with major industrial clients who require reliable supplies of rare earth materials for their products. Additionally, the company's earnings are influenced by global demand for rare earth elements, fluctuations in market prices, and its operational efficiency in mining and processing activities.

Lynas Rare Earths Limited Financial Statement Overview

Summary
Income Statement
Balance Sheet
Cash Flow
Breakdown
Jun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income StatementTotal Revenue
464.45M739.28M920.01M489.02M305.11M
Gross Profit
133.86M325.60M563.54M179.48M30.10M
EBIT
72.42M279.82M524.68M155.29M-13.40M
EBITDA
172.44M416.61M607.80M239.28M70.43M
Net Income Common Stockholders
84.51M310.67M540.82M157.08M-19.39M
Balance SheetCash, Cash Equivalents and Short-Term Investments
523.84M1.01B965.58M680.83M101.73M
Total Assets
2.80B2.64B2.06B1.48B936.13M
Total Debt
183.98M190.35M190.46M173.19M201.96M
Net Debt
-339.86M-820.86M-775.12M-407.63M100.23M
Total Liabilities
562.12M475.27M416.02M394.17M417.74M
Stockholders Equity
2.24B2.16B1.65B1.08B518.38M
Cash FlowFree Cash Flow
-544.38M-183.65M271.16M170.69M15.84M
Operating Cash Flow
34.96M411.87M457.46M211.14M27.93M
Investing Cash Flow
-507.22M-585.86M-87.54M-140.76M-24.65M
Financing Cash Flow
-22.54M205.25M-7.26M412.02M9.03M

Lynas Rare Earths Limited Technical Analysis

Technical Analysis Sentiment
Positive
Last Price8.29
Price Trends
50DMA
7.34
Positive
100DMA
7.05
Positive
200DMA
7.02
Positive
Market Momentum
MACD
0.34
Negative
RSI
61.19
Neutral
STOCH
66.27
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:LYC, the sentiment is Positive. The current price of 8.29 is above the 20-day moving average (MA) of 7.68, above the 50-day MA of 7.34, and above the 200-day MA of 7.02, indicating a bullish trend. The MACD of 0.34 indicates Negative momentum. The RSI at 61.19 is Neutral, neither overbought nor oversold. The STOCH value of 66.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:LYC.

Lynas Rare Earths Limited Peers Comparison

Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
AUALK
68
Neutral
$454.16M24.595.86%10.37%-39.24%
AUILU
66
Neutral
$1.64B7.0610.39%2.20%-9.35%-32.77%
AULYC
59
Neutral
$7.75B152.392.27%-20.07%-74.91%
AUREE
52
Neutral
AU$24.83M-111.05%-100.00%33.33%
49
Neutral
$1.96B-1.42-21.96%3.81%0.71%-27.38%
AUARU
46
Neutral
$480.54M-33.33%65.19%
AUHAS
33
Underperform
AU$68.94M-86.77%-879.59%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AU:LYC
Lynas Rare Earths Limited
8.29
2.10
33.93%
AU:ILU
Iluka Resources Limited
3.82
-3.37
-46.90%
AU:ALK
Alkane Resources Ltd
0.75
0.10
16.28%
AU:ARU
Arafura Resources Limited
0.20
0.01
5.41%
AU:REE
RareX Limited
0.03
<0.01
50.00%
AU:HAS
Hastings Technology Metals Limited
0.36
0.02
5.88%

Lynas Rare Earths Limited Earnings Call Summary

Earnings Call Date: Feb 25, 2025 | % Change Since: 18.94% | Next Earnings Date: Aug 21, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted increased production and significant progress in expansion projects at Mount Weld, alongside improvements in safety. However, these positives were somewhat offset by low market prices, technical challenges at Kalgoorlie, foreign exchange losses, and inventory write-downs. The company remains optimistic about market recovery signs.
Highlights
Increased Production and Sales
NdPr production increased to 2,969 tonnes, and sales volume rose to 3,178 tonnes, reflecting both increased production and inventory.
Successful Expansion at Mount Weld
Mount Weld expansion is tracking on budget with new circuits enhancing capacity and efficiency, including a fourfold increase in mill throughput.
Safety Achievements
The company recorded 1 million hours LTI-free on the Mount Weld expansion project and 1.2 million hours LTI-free in Lynas Malaysia.
Improved Ore Reserves
New drilling and assessment at Mount Weld delivered an ore reserve with more than a 20-year life, including 12,000 tonnes of contained dysprosium oxide.
Market Recovery Signs
There are early signs of market recovery with NdPr prices improving by $5 per kilo following new draft regulations in China.
Lowlights
Lower Market Prices
Rare earth prices have remained stubbornly low over the past 6 months, impacting revenue.
Technical Challenges at Kalgoorlie
The Kalgoorlie facility faced technical challenges, including impurities in the form of sulfate, impacting operational efficiency.
Foreign Exchange Impact
The company faced significant foreign exchange losses due to the weakening of the Australian dollar against the US dollar and Malaysian ringgit.
Inventory Write-down
A write-down was recorded for some lanthanum and cerium inventory.
Company Guidance
In the recent Lynas Rare Earths half-year results briefing for the fiscal year ending December 2024, the company reported several key metrics indicating growth and operational progress. The production of NdPr increased to 2,969 tonnes, while sales volume reached 3,178 tonnes compared to the previous corresponding period. Additionally, the company achieved a lost time injury-free rate with 1 million hours LTI-free at the Mount Weld expansion project and 1.2 million hours LTI-free in Lynas Malaysia. Capital expenditure for the period was $267 million, ending with $308 million in cash and short-term deposits. Despite lower market prices, Lynas's strategic initiatives, including the commissioning and ramp-up of new capacities at various sites, contributed to improved sales revenue and production output. However, the financial results were affected by foreign exchange impacts and costs related to inventory adjustments. The company remains focused on achieving its Lynas 2025 target, with an emphasis on enhancing efficiency and sustainability across operations.

Lynas Rare Earths Limited Corporate Events

Lynas Rare Earths to Announce Quarterly Results on April 28
Apr 15, 2025

Lynas Rare Earths Limited announced that it will release its quarterly results for the period ending 31 March 2025 on 28 April 2025. The announcement will be accompanied by a briefing hosted by the company’s CEO, Amanda Lacaze, which will be webcast for analysts and shareholders. This release is significant for stakeholders as it provides insights into the company’s financial performance and strategic direction.

AustralianSuper Increases Stake in Lynas Rare Earths
Apr 15, 2025

AustralianSuper Pty Ltd has increased its voting power in Lynas Rare Earths Limited from 8.50% to 9.51%, indicating a growing interest and stake in the company. This change in substantial holding could impact Lynas’ market positioning and influence shareholder decisions, reflecting AustralianSuper’s confidence in the company’s future prospects.

Lynas Rare Earths Updates ASX Announcement with Resource Details
Feb 27, 2025

Lynas Rare Earths Limited has re-released its ASX announcement to update a core sample image caption and provide a detailed JORC category breakdown of its Mineral Resource Estimate. This update is part of the company’s ongoing efforts to maintain transparency and accuracy in its resource reporting, which is vital for stakeholders and investors in assessing the company’s resource potential and market positioning.

Lynas Rare Earths Limited Announces 1H FY25 Financial Results
Feb 25, 2025

Lynas Rare Earths Limited released its 1H FY25 results presentation, highlighting its financial performance for the half-year ending December 2024. The presentation emphasizes the company’s strategic positioning in the rare earths market amidst various industry risks and market conditions. The release serves as an informational update for shareholders and potential investors, although it does not constitute financial advice or an investment offer.

Lynas Rare Earths Reports Increased Production Amid Market Challenges
Feb 25, 2025

Lynas Rare Earths Limited reported a net profit after tax of $5.9 million for the first half of the 2025 financial year, despite a challenging market with lower NdPr prices. The company achieved a 22% increase in NdPr production and a 23% increase in sales volume, leading to a revenue increase to $254.3 million. Lynas made significant progress on major projects, including the expansion of facilities at Mt Weld and Kalgoorlie, and the development of new processing capabilities in Malaysia. These advancements are expected to enhance Lynas’s operational efficiency and sustainability, positioning the company to capitalize on future market improvements.

Lynas Rare Earths Releases Interim Financial Report
Feb 25, 2025

Lynas Rare Earths Limited released its interim unaudited consolidated financial report for the half-year ending December 31, 2024. The report provides insights into the company’s financial performance and operational status, which are crucial for stakeholders to assess its market positioning and future prospects.

Lynas Rare Earths to Announce Half Yearly Financial Results
Feb 17, 2025

Lynas Rare Earths Limited is set to release its half yearly financial results for the period ending December 31, 2024, on February 26, 2025. The announcement will include a briefing hosted by CEO Amanda Lacaze, providing insights into the company’s operations and financial performance, which is crucial for stakeholders and analysts in understanding Lynas’s market position and future prospects.

Lynas Rare Earths Announces Change in Substantial Shareholder Interests
Feb 4, 2025

Lynas Rare Earths Limited has announced a change in the interests of its substantial shareholders. The notice was filed by Hancock Prospecting Pty Ltd and associated parties, indicating that Bianca Hope Rinehart, as trustee of the Hope Margaret Hancock Trust, holds an 8.21% interest in Lynas’ fully paid ordinary shares. This change reflects the ongoing adjustments in shareholder positions within the company, which could impact its market dynamics and stakeholder interests.

Lynas Rare Earths Announces Changes in Substantial Holder Interests
Jan 29, 2025

Lynas Rare Earths Limited has announced a change in the interests of a substantial holder as of January 27, 2025. The release details the changes in the voting power and relevant interests of entities like State Street Global Advisors and State Street Bank and Trust Company, highlighting changes in the nature of their voting securities and the exercise of rights to vote attached to these securities. This update may affect the company’s stakeholder dynamics and voting outcomes, given the significant changes in the distribution of voting power.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.