Australia's Lynas hits one-month low as Morningstar flags shares as overpriced

Shares of Lynas Rare Earths LYC.AX, the world's top rare-earths producer outside China, slip as much as 3.4% to A$13.660, their lowest point since November 10

Morningstar kicks off coverage on LYC, pegging its fair value estimate at A$7

Projects EBITDA to surge to a 5-year CAGR of 65%, fuelled by rising sales and firmer prices of rare earth neodymium-praseodymium (NdPr), vital to magnets that power EVs, with volumes expected to double to ~12,500 metric tons by FY30

However, flags that shares look overpriced despite robust growth prospects, with market baking in lofty rare-earth assumptions; hitting the current share price would require a mid-cycle NdPr price tag of ~$220/kg, more than double Morningstar's view of $100/kg

Seven of 14 analysts rate the stock as a "buy" or higher, four as a "hold" and three as a "sell" or lower; mean PT at A$16.31, according to LSEG-compiled data

*Stock last down 2.3%, paring YTD gains to ~115%