UBS has upgraded Lynas Rare Earths to a ‘buy’ recommendation, increasing its price target by 17 per cent to $17.80. This decision reflects growing global demand for rare earths outside of China. Lynas Rare Earths is an Australian company specialising in the mining and processing of rare earth minerals. These minerals are crucial components in various high-tech applications, including electric vehicles and renewable energy technologies.
Analyst Dim Ariyasinghe highlighted Lynas’ strong market position, especially considering ongoing strategic changes in global supply chains. UBS has also revised its long-term forecast for Neodymium-Praseodymium (NdPr) volume, raising it from 12 kilotonnes to 14 kilotonnes. This adjustment indicates increased confidence in Lynas’ future production capabilities and market demand.
The upgrade also factors in the anticipated benefits from Lynas’ $180 million expansion. Ariyasinghe noted that while the 18 to 24-month build and ramp-up period means earnings impacts won’t be immediate, UBS projects an eventual incremental revenue impact of A$700 million from fiscal year 2028. This represents a substantial 27 per cent increase in revenue.
Following the announcement, shares in Lynas Rare Earths experienced a rally, climbing 5.3 per cent to $15.40 in early afternoon trading. This market response underscores investor confidence in the company’s growth prospects and strategic direction.
