Syrah Resources (ASX:SYR) Valuation Revisited After China Tightens Graphite and Lithium Battery Material Exports

Syrah Resources (ASX:SYR) shares have jumped after China announced new export controls on graphite and lithium battery materials. These restrictions have drawn attention to Syrah’s position as a major natural graphite producer outside China.

See our latest analysis for Syrah Resources.

After drifting for much of the year, Syrah Resources has surged back into the spotlight with a 62.3% one-month share price return and a rapid 100% jump year-to-date, as sentiment shifts on the back of China’s export restrictions and analyst upgrades. Despite epic short-term momentum, it is worth remembering the three-year total shareholder return is still deep in the red. While the mood has turned positive, longer-term investors have experienced a bumpier ride.

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With Syrah’s shares rocketing on fresh analyst optimism and tightening supply from China, the real question is whether the current price leaves room for further gains or if the market has already taken future growth into account.

Most Popular Narrative: 9% Undervalued

Syrah Resources last closed at A$0.43, with the most popular narrative setting fair value at A$0.47 per share. While this points to a modest upside, expectations are shaped by bold growth assumptions and catalysts in play.

The U.S. and Chinese government policy changes are creating a demand for ex-China supply chains, positioning Syrah's operations for future growth as they resume production at Balama and commence sales from Vidalia, which can positively impact revenue. Progress toward resolving the protest actions at the Balama site may lead to resumed production, reducing operational disruptions and potentially improving net margins through increased efficiency and output.

Read the complete narrative.

Want a peek into the engine room of this valuation? Find out what makes this forecast tick: sharp margin turnarounds, breakneck double-digit growth, and a future earnings multiple that is usually reserved for market darlings. What's behind the numbers and the storyline? The full narrative unpacks the details.

Result: Fair Value of $0.47 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing disruptions at Balama or delays at Vidalia could quickly turn optimism into caution for Syrah investors. This highlights the narrative’s fragility.

Find out about the key risks to this Syrah Resources narrative.

Build Your Own Syrah Resources Narrative

If you want to chart your own course or challenge the current outlook, you can explore the numbers and craft your own perspective in just a few minutes, Do it your way

A great starting point for your Syrah Resources research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

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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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