The Lynas share price has lost 16% in April, is it a buy?


What a month it has been for the Lynas Rare Earths Ltd (ASX: LYC) share price over April so far. Since the start of the month, Lynas shares have fallen from almost $11 to the late $8 mark we see today. That’s a drop of just over 16%.

To make things even more interesting, Lynas hit a new 10-year high of $11.59 a share on April 4. That means that the Lynas share price has fallen more than 22% from that high.

It’s been a rollercoaster of a year thus far for Lynas shares. Before April, this rare earths company experienced more than one 20% drop and 20% rise, making it an incredibly volatile ASX 200 share. But the slippage we have seen over the past few weeks has been mostly in one direction.

It seems that the boost Lynas shares got from the announcement of the partnership between the US and Australian Governments to secure supply chains of critical minerals like the rare earths that Lynas produces has been short-lived.

So, now that Lynas shares have decisively come off the boil, many ASX investors might be wondering if this company could be a buy today.

Well, one ASX broker who likes the Lynas share price is Macquarie. As my Fool colleague Tristan covered earlier this month, analysts at Macquarie have rated Lynas shares as outperform, with a 12-month share price target of $12.60. That would be a rise of more than 40% if it plays out. Macquarie likes Lynas’ most recent half-year earnings results, as well as the higher prices Lynas is enjoying for its minerals.

However, this bullish position isn’t universally held. As we also covered earlier this month, fellow broker Goldman Sachs isn’t quite as optimistic. Goldman currently has a neutral rating on Lynas, with a 12-month share price target of $9.50. This broker prefers exposure to Iluka Resources Limited (ASX: ILU) over Lynas in the rare earths space. It is buy-rated on Iluka instead, with a 12-month share price target of $14.

So, a mixed opinion bag on Lynas shares right now from some of the top brokers of the ASX. Only time will tell who will end up being right.

Meantime, the current Lynas price gives this ASX 200 resources share a market capitalisation of $7.99 billion.

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