Lynas Rare Earths, a key rare-earth producer outside China, saw its shares plummet to a five-month low following a revenue miss in its March 2026 quarterly report. The company reported invoiced sales revenue of A$265 million, which, despite being its highest quarterly result since Q4 FY22 and a 115% increase year-over-year, fell roughly 19% below analyst expectations. This performance raised concerns among investors and led to significant share price declines.
The primary reason for the shortfall was a production miss, particularly at its new Kalgoorlie processing plant. Total rare earth oxide (REO) production stood at 3,233 tonnes, about 19% below consensus. Neodymium and Praseodymium (NdPr) production, crucial for magnets, was 1,996 tonnes, missing forecasts by approximately 8%. The company attributed these issues to a process improvement initiative for precipitation and impurity removal at Kalgoorlie, which temporarily reduced throughput.
Analyst reactions have been swift, with near-term earnings per share (EPS) forecasts for FY26 seeing cuts ranging from 20-27%. Despite the short-term setbacks, longer-term forecasts for FY28 and beyond remain largely untouched, suggesting analysts view the Kalgoorlie issues as a timing problem rather than a fundamental structural flaw. The company also faces near-term headwinds from rising sulphuric acid costs due to Middle East conflict and power reliability concerns at Kalgoorlie.
However, there were some positive developments. Lynas achieved its first samarium oxide production in Malaysia and secured a binding Letter of Intent with the US Department of Defense for samarium supply, reinforcing its strategic importance. The company’s Malaysian operating license was also renewed for a further ten years, and its Mt Weld expansion is progressing. Brokers currently hold a "BUY" consensus rating for Lynas, with a target price of $20.07, suggesting they believe the stock is undervalued by about 0.5%.
