Lynas Stock Bounces; UBS Retains A “Buy” For Stock; Potential A$3 Per Share Value For Mt Weld Alone

Editor’s Note:

In light of the maiden earnings report, Lynas Corp. stock is moving into “deep value” territory. As reported below, the stock carries a UBS carries buy recommendation. The greatest risk we see is Malaysia. Given the extraordinary value in Lynas Corp., it is hard to see why there is not value in the risk adjusted stock at present levels.

By Rudi Filapek-Vandyck, Editor FNArena

It’ll happen, says mining analyst Christopher Ecclestone at London-UK based Hallgarten & Company; rare earths will have their second coming. Investors preparing for the next specialty elements boom just have to be a little more patient.

In Australia, UBS retains a positive view on come-back kid Lynas Corp ((LYC)) which shouldn’t surprise given the broker’s price target is no less than 78% higher than where the shares are trading at.

Earlier this year, it seemed Lynas was making a successful come-back from the darkest corners of the local share market, where one also finds Millennium Services ((MIL)) and Sundance Energy ((SEA)) to name but two, but that successful come-back has since turned into yet another nightmare for investors who stayed the course with the share price down around $1.80 from $3 in May.

At least the shares are still a long way away from the 38c they were trading at in the darker days.

Analyst Dylan Kelly at CLSA cannot believe it has once again come to this. On his calculation, the Mt Weld operation as a stand-alone business would fetch a valuation of $3 in the current context. He thinks investors are running scared because of potential for renewed political obstruction from the freshly elected Malaysian government (previously in opposition).

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