Lynas Share Price: A Meteoric Rise Faces Operational Headwinds

The Australian equities market has witnessed one of its standout performers in 2025: Lynas Rare Earths. The company's shares have delivered staggering returns, more than doubling in value over the year and significantly outpacing the broader S&P/ASX 200 index. However, this impressive rally has recently encountered turbulence, with profit-taking pulling the share price back to around A$12.40, a notable retreat from its October peaks above A$21. This prompts a critical examination of the rally's underlying strength.

In the near term, the company's operational performance is being tested. Lynas reported significant power outages at its rare earth processing facility in Kalgoorlie, Western Australia, in late November. According to the company, this disruption is expected to wipe out approximately one month of production for the December quarter.

Compounding this issue was a scheduled major maintenance shutdown at its Malaysian cracking and leaching plant. The confluence of these unplanned power issues and planned downtime has amplified production losses. Management has stated its intention to utilize existing inventory to maintain sales, aiming to partially offset the volume impact, though the quarterly production figures will inevitably reflect the disruptions.

A Stellar Run and Index Inclusion

Despite recent pressures, Lynas's performance metrics for 2025 remain extraordinary. Key figures illustrate the scale of its advance:

• Year-to-date share price increase: approximately +90%
• 52-week trading range: A$6.16 to A$21.96
• Current market capitalization: around A$12.66 billion
• One-year total return: over 90%

This powerful performance was formally recognized with the stock's inclusion in the S&P/ASX 50 index, effective December 22, 2025. This milestone is expected to increase visibility and attract greater attention from institutional investors who track this leading benchmark.

Bullish Forecasts Point to a 2026 Surge

Looking beyond immediate challenges, financial projections for fiscal year 2026 paint a picture of robust growth. Analysis from S&P Global Market Intelligence anticipates revenue will nearly double to A$1.1 billion, up from A$557 million in the prior year.

This optimistic outlook is driven by a powerful combination of volume and price increases:

Should investors sell immediately? Or is it worth buying Lynas?

• Total rare earth oxide production is forecast to rise 53% to 16,100 tonnes.
• The average selling price per kilogram is projected to jump 47% to A$72.50.
• The key Neodymium-Praseodymium (NdPr) price is expected to increase 48% to A$118 per kilogram.
• NdPr production volume is anticipated to grow 35% to 8,800 tonnes.

Analyst Sentiment Remains Largely Constructive

Market experts maintain a generally positive stance on Lynas's prospects. In November 2025, Goldman Sachs upgraded its rating from "Hold" to "Strong Buy." Macquarie continues to rate the stock as "Outperform," with a price target of A$17.00.

UBS projects a significant earnings acceleration in the coming years:

• Forecast net profit for FY26: A$288 million
• Forecast net profit for FY27: A$528 million
• Forecast net profit for FY28: A$1.05 billion

The consensus 12-month price target stands at approximately A$15.63, suggesting further upside potential from current levels. Analysts frequently cite Lynas's strategic position as the largest producer of rare earths outside of China as a fundamental advantage.

Geopolitical Tailwinds and Strategic Expansion

Macro-political factors continue to provide a supportive backdrop for demand. Western nations are actively seeking to diversify supply chains for critical minerals, given China's continued dominance of over 90% of global processing capacity. Recent Chinese export restrictions on processing technology have further heightened concerns about supply security.

Lynas has capitalized on this environment, commencing commercial production of Dysprosium and Terbium oxides in Malaysia during 2025. Due to strong demand, production of Samarium is slated to begin in the first half of 2026. CEO Amanda Lacaze has highlighted robust customer demand and a willingness to pay premiums for non-Chinese sourced material.

The future trajectory of Lynas's share price now hinges critically on the company's ability to successfully execute its planned production expansion and capitalize on favorable pricing within this complex geopolitical and operational landscape.