Why Bell Potter rates roaring Liontown shares as a buy

Liontown Ltd (ASX: LTR) shares are pushing higher again on Tuesday.

In afternoon trade, the lithium miner’s shares are up 4% to a new 52-week high of $2.24.

This means its shares are now up 300% since this time last year.

The good news for investors is that Bell Potter believes there are more gains to come.

What is the broker saying?

Bell Potter has been looking at Liontown’s Kathleen Valley lithium mine and has been impressed with the ramp up of its production.

It notes that recent work means that Kathleen Valley is expected to soon hit production rates of 500,000 to 550,000 tonnes of lithium spodumene concentrate per annum. However, it sees scope for an increase to 800,000 tonnes per annum in the future. The broker explains:

LTR’s core asset is the Kathleen Valley lithium mine located in Western Australia’s Northern Goldfields region. LTR took FID on Kathleen Valley in June 2022 and achieved first production in mid-2024. Kathleen Valley is expected to ramp up to 2.8Mtpa ore throughput and lithia recovery rates of 70% in 2H 2026, enabling SC production rates of 500-500ktpa.

There is potential to further expand throughput to 4Mtpa in the longer term, enabling SC production rates of up to 800ktpa. The company has a strong ESG focus as exemplified by its Native Title Agreement and net zero by 2034 carbon emission target. LTR has lithium offtake agreements LG Energy Solutions, Tesla, Ford and Chengxin and Canmax Technologies.

Quarterly preview

Bell Potter is expecting a strong quarterly update from Liontown later this month. It is predicting stronger production and much higher revenue than the first quarter. The broker said:

We expect December 2025 quarterly production of around 110kt SC at a unit operating cost of around A$850/t sold and quarterly revenue of $150m. LTR produced 87.2kt SC (5% Li2O) in the September 2025 quarter, or 19-24% of the FY26 guided range (345-450kt). Quarterly revenue was $68m.

Time to buy

According to the note, Bell Potter has retained its buy rating on Liontown’s shares with an improved price target of $2.48.

This implies potential upside of approximately 11% for investors from current levels.

Commenting on its buy recommendation, the broker said:

Under our updated price outlook, LTR deleverages from net debt of $274m at 30 September 2025 to a net cash position by the end of 2026. EPS changes as a result of these upgrades are: [FY26] now +2.3cps (previously -2.3cps); FY27 +230%; & FY28 +106%. LTR’s 100% owned Kathleen Valley lithium project is highly strategic in terms of scale, long project life and location in a tier-one mining jurisdiction. LTR has offtake contracts with top-tier EV and battery OEMs. Over FY26, LTR will de-risk the ramp up of Kathleen Valley. LTR has a strong balance sheet with long tenor debt finance.

The post Why Bell Potter rates roaring Liontown shares as a buy appeared first on The Motley Fool Australia.

More reading

• ASX mining shares on fire! New 52-week highs today
• Here are the top 10 ASX 200 shares today
• Silver, lithium, and critical minerals commodities book double digit gains in just one week
• Up 260% in a year, can this ASX 200 lithium stock keep climbing in 2026?
• ASX 200 materials sector dominates as scores of mining shares hit new highs

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.