The Liontown Resources Limited (ASX: LTR) share price is having another difficult day.
In afternoon trade, the lithium developer's shares are down 3.5% to $1.50.
This means the Liontown share price is now down 22% since the start of December.
Is the Liontown share price a bargain buy now?
While the recent weakness in the Liontown share price is disappointing for shareholders, it could be a buying opportunity for non-shareholders.
This month the team at Bell Potter named Liontown as one of its top picks for 2022 and is predicting significant upside for its shares.
According to the note, the broker has a (speculative) buy rating and $2.15 price target on the company's shares. Based on the current Liontown share price, this implies potential upside of 43% over the next 12 months.
Why is Bell Potter so bullish?
Bell Potter is a fan of Liontown due to its exposure to lithium through its Kathleen Valley Lithium Project in Western Australia. The broker notes that as its future offtake is uncommitted, it is well-placed to take advantage of supply shortages as decarbonisation policies are enacted.
In respect to the lithium market, Bell Potter commented: "Surging lithium commodity prices in 2021 have highlighted an emerging supply-demand deficit. This deficit is expected to widen with the ongoing uptake of electric vehicles and battery storage systems. The value of uncontracted lithium supply is evidenced by heightened sector corporate activity and record spot prices achieved by Australian spodumene producers."
With that in mind, the broker said: "LTR is positioned to become a key supplier of battery raw materials and is now capable of funding Kathleen Valley's initial development capital. The project DFS highlighted production of 658ktpa SC6 with potential for conversion into 86ktpa lithium hydroxide (75ktpa lithium carbonate equivalent, LCE). LTR is independent, debt free and with all offtake uncommitted it is in a strong strategic position in a market for lithium facing supply shortages as decarbonisation policies are enacted. Key catalysts are now signing product offtake contracts, project permitting and commencing project development."
All in all, this could make the Liontown share price great value after its recent pullback.
