Why is the Liontown share price roaring 12% higher today?

a man sits on a rocket propelled office chair and flies high above a citya man sits on a rocket propelled office chair and flies high above a city

It’s been a very positive day indeed for ASX shares and the S&P/ASX 200 Index (ASX: XJO) this Friday. As we barrel towards the weekend, the ASX 200 has put on a healthy 0.42% at the time of writing, placing the index at just under 7,290 points. But that’s nothing compared to the bonanza currently being enjoyed by the Liotnown Resources Ltd (ASX: LTR) share price. 

Liontown shares are on fire today, no other way to put it. This ASX 200 lithium stock closed at $1.44 a share yesterday and opened at $1.42 this morning. But as it presently stands, Liontown has rocketed by a whopping 12.15% up to $1.62 a share.

So what’s going on with Liontown that might have elicited such a dramatic jump in valuation?

Well, it’s not entirely clear, unfortunately. There hasn’t been much in the way of news or announcements out of Liontown itself today. Or indeed, this month so far.

Looking at other ASX 200 lithium shares, we do see some gains. For example, Pilbara Minerals Ltd (ASX: PLS) shares are up a decent 2.33% so far to $4.18 each. Core Lithium Ltd (ASX: CXO )is up by 2.12% at 97 cents a share. And the Allkem Ltd (ASX: AKE) share price has risen by 1.94% to $12.34.

So some healthy moves, but none on Liontown’s level.

What’s with the Liontown share price spike then?

It’s possible that Liontown shares’ sharp rise can be explained by a recent broker recommendation on Liontown. As we covered just yesterday, ASX broker Bell Potter has come out with a speculative buy rating on Liontown shares.

The broker gives the Liontown share price a 12-month target of $2.81. If realised, this would result in an upside of more than 75% from where the shares are right now (after today’s monster move higher).

That would obviously be a very alluring prospect for investors and could explain why we are seeing such a noticeable rush into the Liontown share rice this Friday.

Liontown has already had a great start to 2023. Over the year to date, the Liontown share price has now risen by a pleasing 30.9%:

Even so, the company remains down more than 26% from its most recent 52-week high of $2.22 a share. So no doubt investors will be encouraged by what they’ve seen today. But we’ll have to wait and see if Liontown indeed does make it to $281 a share over the next 12 months.

The post Why is the Liontown share price roaring 12% higher today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen 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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