Why has the Liontown share price roared 30% higher in a week?

The Liontown Resources Limited (ASX: LTR) share price yet again headed north on Wednesday.

This comes as the lithium developer’s shares have now registered 7 consecutive trading days in the green.

At market close, the company’s share price is up 1.48% to $1.72 – leading to a gain of 29.81% since this time last week.

Let’s take a look at the latest surrounding the battery metals exploration and development company.

What’s powering Liontown shares forward?

While the company hasn’t made any announcements since earlier this month, one broker weighed in on the Liontown share price.

As reported by my Fool colleague James, Bell Potter believes the ASX lithium stock is highly underrated.

The broker put out a speculative buy rating with a $2.87 price target on the company’s shares. Based on where Liontown trades currently, this implies an upside of 67% for investors.

Bell Potter noted that the company is “independent and in a strong strategic position in a market for lithium facing supply shortages.”

This comes as Liontown is fully funded for initial development of its Kathleen Valley Lithium Project in Western Australia.

The company commenced work at Kathleen Valley in 2017 and has since developed the site into a Mineral Resource Estimate of 156Mt at 1.4% lithium oxide (Li2O) and 130 parts per million (ppm) tantalum pentoxide (Ta2O5).

Also providing support, lithium carbonate prices currently remain stable – trading at US$70,500 per tonne. This reflects an increase of almost 400% year-on-year.

Other popular lithium companies such as Lake Resources N.L. (ASX: LKE) and Core Lithium Ltd (ASX: CXO) also finished higher today, up 6.45%, and 3.21%, respectively.

Liontown share price snapshot

After touching a year-to-date low of 87.5 cents on 24 June, Liontown shares are making a strong comeback, up 96%.

It appears investor sentiment is continuing to grow along with a broader recovery of the ASX after recording strong volatility in June.

When looking at year-to-date, Liontown shares are 4% higher for the period.

Based on today’s price, the company commands a market capitalisation of approximately $3.77 billion.

The post Why has the Liontown share price roared 30% higher in a week? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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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