UBS positive on long-term rare-earths demand, upgrades Lynas to 'buy'

Iluka Resources

04/04/2023 04:29

** Analysts at UBS are positive on long-term fundamentals of
rare-earths as demand numbers still reflect robust growth
through EV/renewables demand
    ** Remain positive on the commodity and see current price
weakness as temporary with a potential recovery underway as
early as 2H23 - UBS
    ** UBS also does not expect Tesla's plan to eliminate
rare-earths in its next-generation EVs to have "a significant
impact within our forecast horizon"
    ** However, short-term deteriorating macro fundamentals
prompt brokerage to cut its price forecast for
neodymium-praseodymium (NdPr) by 11% in CY23 to $86 per kg
    ** Brokerage expects NdPr demand to lift 14% in 2023 to 87
thousand tonnes (kt), down 3 kt from prior view
    ** UBS upgrades recommendation on LYC to "buy" from
"neutral" on significant drop in share price since peak in
January, but trims LYC price target to A$8.80 from A$9
    ** Remains "neutral" on mineral sands company Iluka
Resources Ltd  ILU.AX  and retains PT of A$11.20

    

 (Reporting by Sameer Manekar in Bengaluru)
 ((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar))