Is Speculation of an Australia–US Rare Earths Deal Altering the Investment Case for Iluka Resources (ASX:ILU)?

• In the past week, rare earth stocks experienced strong gains after renewed tensions between China and the US over critical mineral exports, as well as media reports suggesting Australia and the US could pursue a broad rare earths supply agreement.
• This has brought fresh attention to Australian suppliers like Iluka Resources, which could become increasingly important in efforts to diversify critical mineral supply chains outside of China.
• Next, we'll examine how speculation over an Australia–US rare earths deal may impact Iluka Resources' current investment narrative.

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Iluka Resources Investment Narrative Recap

Owning shares in Iluka Resources means believing that demand for non-Chinese rare earth supply will continue to grow, underpinned by global efforts to secure alternative sources and supply chain security. While the recent speculation about an Australia–US rare earths deal has fueled optimism, the most immediate catalyst remains the progress of Iluka’s Eneabba refinery project, while risks still center on cost inflation and the execution of major capital investments; there is limited evidence that the news event materially changes these short-term drivers right now. Among Iluka’s recent developments, the August 2025 dividend cut is most relevant here, as it reflects near-term earnings pressures despite renewed enthusiasm for the rare earths sector. This announcement highlights that even as external catalysts develop, operational challenges and profitability remain at the forefront for shareholders watching both output and cost trends. Yet on the downside, even as policy and supply chain news grab headlines, rising costs in Australia may quietly impact near-term profitability in ways that investors should be aware of...

Read the full narrative on Iluka Resources (it's free!)

Iluka Resources' outlook anticipates A$1.8 billion in revenue and A$192.4 million in earnings by 2028. This scenario is based on an expected 16.9% annual revenue growth rate and a modest earnings increase of A$2.8 million from current earnings of A$189.6 million.

Uncover how Iluka Resources' forecasts yield a A$6.67 fair value, a 13% downside to its current price.

Exploring Other Perspectives

Simply Wall St Community members have published 11 fair value estimates for Iluka Resources, ranging from A$4.10 to A$45.87 per share. These varied views sit alongside current risks tied to rising production costs, encouraging you to consider multiple opinions before making up your mind.

Explore 11 other fair value estimates on Iluka Resources - why the stock might be worth over 5x more than the current price!

Build Your Own Iluka Resources Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Iluka Resources research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Iluka Resources research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Iluka Resources' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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