Lynas Rare Earths plan to expand production at its Mt Weld mine in Western Australia surprised Ord Minnett, the broker considering it to be expensive and potentially ill-timed, and increasing the broker's concerns regarding execution risk.
The company also signalled another two growth projects.
Overall, the broker concedes the expansion should deliver longer-term growth.
Lighten recommendation retained. Target price rises to $5.35 from $5.
Sector: Materials.
Target price is $5.35.Current Price is $8.90. Difference: ($3.55) - (brackets indicate current price is over target). If LYC meets the Ord Minnett target it will return approximately -66% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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