The Liontown Resources Limited (ASX: LTR) share price was out of form last month despite some big news.
The lithium developerâs shares sank 25% to end the month at $1.06.
Will things be better for the Liontown share price in July?
One leading broker appears optimistic that July could be a better month for the Liontown share price.
According to a note out of Bell Potter, its analysts have named the lithium share as one of its top picks of FY 2023.
The broker currently has a speculative buy rating and $3.06 price target on the companyâs shares. This implies potential upside of 200% for investors over the next 12 months if everything goes to plan.
This works out to be an average return of 9.5% per month when compounded. So the Liontown share price will need to get a wriggle on after its poor start to the month (5% decline on Friday).
What did the broker say?
Bell Potter highlights that rising rates have been weighing on battery materials stocks. However, it believes investors should look beyond this and focus on the positive outlook for the sector due to supply constraints and strong demand.
The broker explained:
The prospect of tightening monetary policy and recession across major global economies has weighed heavily on battery minerals exposed equities, despite decarbonisation being a prevailing theme over the medium to long term.
We think the global auto manufacturing sector is likely to continue its re-tooling to supply EVs, supported by corporate targets and government policy, leading to sustained strong battery mineral demand. But the battery mineralsâ supply sideâs response faces significant hurdles with respect to permitting, project development and ramp-up. On this basis, we remain positive on the sector.
In light of this, it sees Liontownâs shares as a great option for investors looking for exposure to the sector.
The post Will the Liontown share price bounce back in July? appeared first on The Motley Fool Australia.
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More reading
- Top broker names 3 of the best ASX 200 shares to buy in FY23
- Why have ASX lithium shares had such a lousy month in June?
- Top broker says the Liontown share price can rise 150%
- 5 things to watch on the ASX 200 on Thursday
- Here are the top 10 ASX shares today
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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