Why this top broker is tipping 200% upside for the Liontown share price

The broker is tipping significant upside for the lithium company’s share price.

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Key points

  • Bell Potter has tipped the Liontown share price to triple to $3.06 over the coming 12 months
  • The broker is said to like the company's Kathleen Valley project and strong cash position
  • Additionally, another expert has reportedly dismissed claims that lithium's run is over, noting the market is continuing to cycle

The Liontown Resources Limited (ASX: LTR) share price could triple in the near future, according to a top broker.

Bell Potter slapped the stock with a speculative ‘buy’ rating and a $3.06 price target, as my colleague James Mickleboro reported yesterday.

That’s a significant jump from the current Liontown share price – $1.02.

So, what does the top broker like about the S&P/ASX 200 Index (ASX: XJO) lithium-focused materials stock? Let’s take a look.

Liontown share price tipped to triple

The Liontown share price might gain 200% in the next 12 months and its Kathleen Valley lithium project could help it get there, according to Bell Potter.

Kathleen Valley is located in Western Australia. The company finalised its definitive prefeasibility study in November.

Bell Potter noted the study showed the project could produce 658 kilotons of lithium oxide each year and has the potential to convert 86 kilotons into lithium hydroxide annually.

Kathleen Valley is expected to achieve its first production in the second quarter of 2024.

The broker is also said to like that the company is fully funded to develop the project following a $450 million placement late last year.

On top of that, it’s independent and debt-free. That makes for “a strong strategic position in a market for lithium facing supply shortages,” Bell Potter said.

Bell Potter’s bullish view comes despite the Liontown share price having dumped around 42% year to date. Though, the broker’s not alone in holding a positive outlook for lithium stocks.

Shaw & Partners’ Peter O’Connor reportedly believes ASX lithium shares will hit new highs (and lows) as future demands shift. O’Connor said, courtesy of Livewire:

We’ve [previously] seen the lithium cycle twofold – 2015 to late 2017 and late 2020 to a month ago …

Think about it as cycles within cycles. This cycle is not over.

However, when values might rise – and by how much – is anyone’s guess.

“Lithium, graphite, and rare earths markets … aren’t commodity markets, they’re product markets,” O’Connor told the publication.

“They’re very niche and there’s not a specific price print, so understanding where we are in the cycle is quite difficult.”

Motley Fool contributor Brooke Cooper 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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