Is Lynas (LYC) a bargain?

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Question asked 09/02/2024

Is Lynas (LYC) a bargain?

Happy New Year MM team! I am an avid reader of your reports and a happy subscriber. Thanks for your efforts. Lynas Rare Earths (LYC) have lost the love of the market, there is no doubt about that. But is the market getting too negative about LYC? Their quarterly production report was generally well received by analysts at UBS and Macquarie, with their target prices reflecting that. For those of us who have followed LYC for many years, their quarterly update was as expected, with the business pretty much controlling what they can control. In spite of rare earth prices continuing to be depressed, the company is still profitable and the strategic importance of Lynas assets hasn't evaporated. Therefore, is LYC a bargain at the current share price? Thanks, Angela

Answer

Hi Angela,

Thanks for the positive feedback, much appreciated. We must be in sync having discussed LYC in our Thursday “What Matters Today Report” – Our conclusion stands which is not surprising a few days later:

We like LYC as a bullish China proxy, but opted for ILU this week, although both offer good risk/reward after deep corrections – LYC reports on the 27^th of February.

Obviously LYC and ILU are not a case of comparing apples with apples but they do have a close correlation. Accumulating LYC in the $5-6 region looks excellent risk/reward but with the trend clearly down its not one for the proverbial kitchen sink or nervous investor.

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Lynas Rare Earths Ltd (LYC)

LAST UPDATED 08/02/2024 15:30

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