Strong, page-225

Good point but unlikely to overcome the dreamers ideas of, it is underpriced. They will just say profits will be so much higher in 2025 it will be worth much more then. They will do this without ever working out what the profits might be in 2025. I personally believe profits will be at least 3 X in 2025 what they were in H1 2021 but at a normal PE that still means a SP of less than $3.00. Or they will compare to MP and correctly say Lynas MC should be higher than MPs . This is true, but they never even think if MP might be severely over priced.
They fail to understand how PE and T bill rates have always been linked and as T bills go up PEs go down.
Market Statistics (ASX): PE, Earnings & Yield - Market Index
The first chart is dividend yield and this has dropped as stock have become inflated. Next is PE which is what we are talking about Next chart is earning yield which I find very interesting historically the ASX earnings are about 7% of SP. Right now ASX is 1.5%. Lynas is 0.4% My guess is after 2021 AR Lynas will be about 1 % If market starts wanting even 5% in 2023 and Lynas profits double (which I doubt) it is still a sub $3.00 SP


The long term historical PE average of the ASX is about 15 it reached 80 recently and has now dropped to 65. If Lynas PE drops to 15 and 2021 is as good as I think it will be then stock will be about AUD 1.00. PE will take a year, maybe more, to drop. 2021 AR will drop PE to close to 100. I firmly believe that 2021 will be the best year ever for both profits and revenue but that will not overcome a market wide drop in PE ratios. The higher a companies PE is, the faster and harder its SP will fall. This has been true since 1920s. True of all markets around the world including ASX. Does that mean it is guaranteed to revert to old levels? No. I will not bet against it.