Lynas Rare Earths Limited Just Missed Earnings - But Analysts Have Updated Their Models

As you might know, Lynas Rare Earths Limited (ASX:LYC) recently reported its yearly numbers. Revenue of AU$557m surpassed estimates by 2.9%, although statutory earnings per share missed badly, coming in 80% below expectations at AU$0.0085 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Following the latest results, Lynas Rare Earths' 13 analysts are now forecasting revenues of AU$1.03b in 2026. This would be a major 86% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 4,156% to AU$0.36. In the lead-up to this report, the analysts had been modelling revenues of AU$1.02b and earnings per share (EPS) of AU$0.27 in 2026. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the massive increase in earnings per share expectations following these results.

View our latest analysis for Lynas Rare Earths

The consensus price target rose 9.2% to AU$11.20, suggesting that higher earnings estimates flow through to the stock's valuation as well. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Lynas Rare Earths analyst has a price target of AU$13.25 per share, while the most pessimistic values it at AU$5.50. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Lynas Rare Earths' growth to accelerate, with the forecast 86% annualised growth to the end of 2026 ranking favourably alongside historical growth of 4.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.3% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Lynas Rare Earths is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Lynas Rare Earths following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Lynas Rare Earths analysts - going out to 2028, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Lynas Rare Earths that you should be aware of.

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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.