Down 20% since February, have Lynas rare earths shares been oversold?
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Is it possible that the drop in Lynas Rare Earths Ltd (ASX: LYC) shares since February could present an advantageous situation?
The value of Lynas company's stocks decreased by 20.82% after the market closed on February 1st, and they are currently being sold for $7.68 for each stock. Just to give an idea, the S&P/ASX 200 Materials Index (ASX: XMJ) has gone down by almost 5% in the same period.
We'll examine the future prospects of this particular rare earths stock on the Australian Securities Exchange.
Any Plans?
Lynas Rare Earths is extracting rare earths from the Mt Weld mine located in the western region of Australia. Additionally, the company manages rare earths processing facilities situated in Malaysia and Kalgoorlie.
Michael Gable, who is the managing director of Fairmont Equities, is suggesting that people should buy shares in Lynas. He is an analyst.
Gable believes that Lynas will bring in more investors even though it has been excessively marketed recently. Sharing his thoughts with The Bull, Gable expressed his positivity towards Lynas.
LYC stocks were oversold recently due to worries that the production may be affected after LYC transitioned to its new processing plant in Kalgoorlie.
LYC has been given an extension for its Malaysian factory which means they won't have any loss in production hours. As well as this, we predict more purchasers will be drawn to the stock due to the positively changing attitudes towards resources.
Alternatively, Lynas received a $6.90 price target from Goldman Sachs last month, indicating a potential decline of 10% in the value of the shares.
Nonetheless, Lynas received an optimistic assessment from Macquarie, who gave it an outperform rating. Furthermore, Bell Potter has raised its projected share price for the company to $8.90, indicating a positive outlook.
Lynas got some good news in the beginning of May - they've been given permission to keep their processing facility in Malaysia running until the first of January, 2024. This happened after Lynas asked the Minister of Science, Technology and Innovation in Malaysia to reconsider their situation. Before this, Lynas had said that they would have to stop operating their Malaysian plant in July.
Over the last twelve months, the value of Lynas Rare Earths' stock has decreased by close to 10%.
This particular rare earths company on the ASX possesses a market value of approximately $7.1 billion as per the most recent stock price.
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