At A$11.226 per share, Lynas Rare Earths (ASX: LYC) appears reasonably valued when considering its existing operations, recently completed expansion work and stronger rare earth pricing. With approximately 1.01 billion shares on issue, the assessed price values the company’s shares at around A$11.3 billion.
For the six months to 31 December 2025, Lynas reported revenue of A$413.7 million, EBITDA of A$152.4 million and net profit after tax of A$80.2 million. Basic earnings were 8.19 cents per share for the half; simply annualising this figure gives approximately 16.38 cents per share and a P/E ratio of around 68.5 times at the assessed price. This is a relatively high multiple and indicates that A$11.226 cannot be justified by the first-half earnings alone. It allows for higher production, improved pricing and better use of the company’s expanded facilities.
The March 2026 quarter showed progress toward this stronger earnings base. Gross sales revenue increased to A$265 million, while Lynas sold 3,131 tonnes of rare earth products at an average price of A$84.60 per kilogram. Total rare earth oxide production was 3,233 tonnes, including 1,996 tonnes of NdPr, both substantially higher than during the December quarter.
Cash and short-term deposits reached A$1.07 billion at the end of March, providing considerable funding capacity for future expansion. However, approximately A$914 million of the FY26 year-to-date cash inflow came from the company’s recent share issue, meaning the cash balance should not be viewed as having been generated entirely from operations.
The updated agreement with Lynas’s Japanese partners also provides greater pricing certainty. It includes firm annual offtake of 5,000 tonnes of NdPr with a floor price of US$110 per kilogram, alongside commitments covering a portion of Lynas’s heavy rare earth production. The ten-year renewal of the Lynas Malaysia operating licence also reduces an important regulatory uncertainty surrounding its processing operations.
Importantly, this assessment gives some allowance for the continued ramp-up of the completed Mt Weld and Kalgoorlie expansion projects and the pricing protection provided by existing supply agreements. It does not assign significant value to the full Towards 2030 growth strategy, additional heavy rare earth capacity, new feedstock sources, worldwide supply arrangements or downstream metal and magnet partnerships. These may provide additional upside over time, but remain subject to rare earth prices, production performance, operating costs, customer demand, and project execution.
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