Lynas Rare Earths Ltd (LYC.AU) saw its shares plummet by 5.02% during the intraday session on Monday, marking a significant decline for the rare-earths producer.

The drop follows Morningstar's initiation of coverage on Lynas, where the research firm pegged the stock's fair value estimate at A$7, well below its current trading price. Morningstar highlighted robust growth prospects, including a projected 65% 5-year CAGR in EBITDA, but flagged the shares as overpriced, citing lofty market assumptions for rare-earth prices. This analysis likely triggered investor concerns, leading to the sell-off.