Lynas Rare Earths Ltd (ASX: LYC) shares are enjoying a welcome day of outperformance today.

Shares in the S&P/ASX 200 Index (ASX: XJO) rare earths miner closed yesterday trading for $6.72. In afternoon trade on Tuesday, shares are changing hands for $6.85, up 1.9%.

For some context, the ASX 200 is down 0.5% at this same time.

If Lynas shares can hold onto these gains by market close, it will mark only the second time in the past 12 trading days that the rare earths miner has finished in the green.

The selling trend sees the stock down 15% since the closing bell on 8 November.

And according to Sequoia Wealth Management's Peter Day (courtesy of The Bull), the rare earths miner is likely to fall further from here.

Are Lynas shares a sell?

"Gross sales revenue of $120.5 million in the first quarter of fiscal year 2025 was down on the $136.6 million generated in the previous quarter," said Day, who has a sell recommendation on Lynas shares.

Day added:

Lynas reported rare earths prices continued at low levels during the first quarter, with a small improvement in the NdPr (neodymium praseodymium) price towards the end of the quarter.

Total rare earth oxide production of 2,722 tonnes in the first quarter was up on the previous quarter. Production levels were managed in line with market demand, as LYC focuses on its margin over volume strategy given the current pricing environment.

He noted that, "The shares have fallen from $8.09 on November 8 to trade at $6.89 on November 21."

This is just above the $6.85 a share at the time of writing today, which is some 20% higher than Sequoia Wealth Management's price target for Lynas shares.

"In our view, the share price appears stretched compared to our price target of $5.50," Day concluded.

What else did the ASX 200 rare earths miner report for Q1?

Investors reacted sceptically to Lynas' Q1 FY 2025 update, released on 30 October.

Despite the quarterly uptick in rare earths production, Lynas shares closed the day down 1.0% and dropped another 0.7% the following day.

The miner has also been burning through cash.

As at 30 September, Lynas reported holding cash and short-term deposits of $413 million, down 54% year on year.

Looking ahead, management sounded a positive note for 2025, saying:

Progress on Lynas growth projects to deliver our target of 10,500 tonnes of NdPr capacity in FY 2025 continued on track…

Work to optimise production costs and improve recoveries from mine to finished products continued in the quarter and remains a focus across all sites.

Despite the recent selling, the Lynas share price remains up 5% over 12 months. Which, according to Sequoia Wealth Management's Day, appears "stretched".