Lynas Rare Earths Valuation

Is LYC undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of LYC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: LYC (A$5.69) is trading below our estimate of fair value (A$19.12)

Significantly Below Fair Value: LYC is trading below fair value by more than 20%.


Key Valuation Metric

Which metric is best to use when looking at relative valuation for LYC?

Other financial metrics that can be useful for relative valuation.

LYC key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue7.7x
Enterprise Value/EBITDA28.9x
PEG Ratio0.8x

Price to Earnings Ratio vs Peers

How does LYC's PE Ratio compare to its peers?

The above table shows the PE ratio for LYC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average21.2x
IGO IGO
23.2x21.6%AU$5.2b
ILU Iluka Resources
9x-2.0%AU$3.0b
MIN Mineral Resources
33.9x30.2%AU$13.3b
NIC Nickel Industries
18.7x40.5%AU$3.3b
LYC Lynas Rare Earths
26.6x33.1%AU$5.2b

Price-To-Earnings vs Peers: LYC is expensive based on its Price-To-Earnings Ratio (26.6x) compared to the peer average (21.6x).


Price to Earnings Ratio vs Industry

How does LYC's PE Ratio compare vs other companies in the AU Metals and Mining Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a13.6%
n/an/an/a
No. of CompaniesPE048121620

Fetching data

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a13.6%
n/an/an/a
No more companies

Price-To-Earnings vs Industry: LYC is expensive based on its Price-To-Earnings Ratio (26.6x) compared to the Australian Metals and Mining industry average (12.5x).


Price to Earnings Ratio vs Fair Ratio

What is LYC's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

LYC PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio26.6x
Fair PE Ratio26.1x

Price-To-Earnings vs Fair Ratio: LYC is expensive based on its Price-To-Earnings Ratio (26.6x) compared to the estimated Fair Price-To-Earnings Ratio (26.1x).


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst LYC forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentAU$5.69
AU$7.17
+25.9%
14.0%AU$10.00AU$5.00n/a14
Mar ’25AU$6.11
AU$7.64
+25.1%
13.4%AU$10.00AU$6.50n/a13
Feb ’25AU$5.68
AU$8.25
+45.3%
19.2%AU$12.00AU$6.50n/a12
Jan ’25AU$7.16
AU$8.98
+25.5%
14.9%AU$12.00AU$7.20n/a12
Dec ’24AU$6.35
AU$9.17
+44.4%
15.1%AU$12.00AU$7.20n/a13
Nov ’24AU$7.09
AU$9.22
+30.1%
15.3%AU$12.00AU$7.20n/a13
Oct ’24AU$6.79
AU$9.05
+33.3%
16.5%AU$12.00AU$6.50n/a13
Sep ’24AU$7.24
AU$9.07
+25.3%
16.2%AU$12.00AU$6.50n/a13
Aug ’24AU$6.93
AU$9.11
+31.5%
18.2%AU$12.00AU$6.60n/a12
Jul ’24AU$6.85
AU$9.06
+32.3%
17.5%AU$12.00AU$6.70n/a13
Jun ’24AU$7.45
AU$9.14
+22.7%
17.0%AU$12.00AU$6.70n/a13
May ’24AU$6.42
AU$8.54
+33.0%
20.7%AU$12.00AU$6.40n/a12
Apr ’24AU$6.34
AU$8.96
+41.3%
20.1%AU$12.00AU$6.60n/a12
Mar ’24AU$8.37
AU$9.59
+14.6%
19.1%AU$12.78AU$6.70AU$6.1112
Feb ’24AU$9.70
AU$10.08
+3.9%
20.6%AU$12.78AU$4.95AU$5.6811
Jan ’24AU$7.85
AU$9.57
+21.9%
22.9%AU$12.78AU$4.95AU$7.1610
Dec ’23AU$8.80
AU$9.54
+8.4%
23.1%AU$12.78AU$4.95AU$6.3510
Nov ’23AU$8.64
AU$9.43
+9.2%
21.6%AU$12.78AU$4.95AU$7.0910
Oct ’23AU$7.56
AU$10.06
+33.1%
24.2%AU$13.00AU$4.80AU$6.798
Sep ’23AU$8.70
AU$10.20
+17.3%
24.3%AU$13.00AU$4.85AU$7.248
Aug ’23AU$9.10
AU$10.26
+12.7%
25.2%AU$13.00AU$4.70AU$6.938
Jul ’23AU$8.96
AU$10.53
+17.5%
24.2%AU$13.00AU$4.70AU$6.858
Jun ’23AU$9.22
AU$10.56
+14.5%
25.6%AU$13.00AU$4.70AU$7.457
May ’23AU$9.16
AU$10.56
+15.3%
25.6%AU$13.00AU$4.70AU$6.427
Apr ’23AU$11.09
AU$10.98
-1.0%
28.2%AU$14.00AU$4.50AU$6.346
Mar ’23AU$10.64
AU$10.68
+0.4%
25.3%AU$13.00AU$4.50AU$8.377

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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