Liontown Resources Ltd (ASX: LTR) shares have gained 4% so far this week.
Shares in the ASX lithium stock are currently trading for $1.40 apiece, which gives it a market cap of $3.1 billion.Â
But Stuart Howe, an analyst at Bell Potter, believes Liontown shares could have much further to run.
The broker has a speculative buy rating on the stock, with a price target of $2.81 per share.
Thatâs 101% above the current Liontown share price.
Whatâs happening with the ASX lithium stock?
Liontown is currently developing its Kathleen Valley Lithium Project, located in Western Australia.
Lithium mineralisation at the project is hosted within spodumene-bearing pegmatite dykes.
The miner expects first production at the project in mid-2024 with a capacity between three to four million tonnes per year.
In the companyâs quarterly results, released 31 January, Liontown did note that it was facing industry-wide cost escalations. However, its balance sheet was strong, with a cash balance of $384 million as at 31 December and an undrawn $300 million debt facility with Ford Motor Company.
Liontown shares closed down 5.7% on the day it reported.
Commenting on the companyâs progress towards production, managing director Tony Ottaviano said:
The December quarter marked a significant period of progress for Liontown with construction activity stepping up on-site at Kathleen Valley, key contracts awarded and new personnel joining us as we continued to build our high calibre team.
Ottaviano added, “The rapid and efficient achievement of so many early critical path construction milestones set us up for the successful delivery of the project.”
While first production is still likely more than a year away, Liontown shares could benefit in the meantime from an alternate source of revenue. The company is progressing with a Direct Shipping Ore (DSO) opportunity. This will enable it to sell material that wasnât originally expected to be processed.
How have Liontown shares been performing?
As you can see on the chart below, Liontown shares are down 7% over the past 12 months.
Longer-term, the ASX lithium stock has gained a whopping 3,400% over five years.
The post Buy Liontown shares for 100% upside: broker appeared first on The Motley Fool Australia.
Should you invest $1,000 in Liontown Resources right now?
Before you consider Liontown Resources, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Liontown Resources wasn’t one of them.
The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
See The 5 Stocks
*Returns as of March 1 2023
(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}
setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()
More reading
- 4 ASX 200 lithium shares to buy now: broker
- Roar! Broker initiates coverage on Liontown shares with buy rating
- Here are the 10 most shorted ASX shares this week
- Here are the top 10 ASX 200 shares today
- Why are ASX 200 lithium shares having such a stellar run today?
Motley Fool contributor Bernd Struben 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.
from The Motley Fool Australia https://ift.tt/VcRAC4z
Stock Pick 