ASX expert recommends purchasing Lynas shares immediately

Lynas Rare Earths Ltd (ASX: LYC) shares have surged by 2.52% to $6.11 per share on Thursday, showing signs of recovery from a recent dip in share price. The company’s stock hit a 52-week low of $5.49 on March 27 before rebounding by 11% to its current value.

Lynas is the leading producer of separated rare earths outside of China, with its Mt Weld mine in Western Australia being one of the world’s top rare earths deposits. The company extracts rare earths like neodymium and praseodymium, which are crucial components in electronics, wind turbines, and electric vehicles.

Goldman Sachs, a top broker, has reiterated its buy recommendation on Lynas shares, with a 12-month price target of $7.50. This suggests a potential upside of 22.75% for investors who buy Lynas shares now. The broker attributes its rating to Lynas being undervalued, with a strong balance sheet and a promising future in the rare earths market.

In its recent 1H FY24 report in February, Lynas reported a 74% decline in half-year profits due to weaker commodity prices. However, the company still managed to deliver a profitable first half, with a 1.03% increase in share price. Lynas CEO Amanda Lacaze remains optimistic about the company’s future, citing strong customer demand and a focus on operational efficiency and growth projects to capitalize on market opportunities.

Investors are keeping a close eye on Lynas as the company navigates market challenges and strives towards continued growth and profitability in the rare earths sector.