The Vulcan Energy Resources Ltd (ASX: VUL) share price was out of form on Monday.
The lithium developer's shares tumbled 6% to close the day at $7.35.
This means the Vulcan share price is now down 32% since the start of the year.
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Can the Vulcan share price rise again?
The good news is that a leading broker in Europe sees significant value in the German-based lithium developer's shares.
According to a note out of Alster Research, its analysts have retained their buy rating with a trimmed price target of $20.00.
Based on the current Vulcan share price, this suggests potential upside of 172% for investors over the next 12 months.
What did the broker say?
Alster highlights that Vulcan is facing a very important 12 months and will soon be pushing ahead with a major drilling program.
The broker also notes that the company's definitive feasibility study (DFS) and pre-feasibility study (PFS) are on the horizon. Its analysts suspect that they could result in production targets being lifted, which they feel could give the Vulcan share price a boost.
The broker commented:
Vulcan faces a landmark year, as it will soon enter a multi-year capex-intensive phase. Building on a strong cash position of EUR 175m per 30 June 2022, the company is preparing its drilling program to commence, while the rigs are currently being prepared. The favorable political environment should continue to provide tailwinds.
Regarding the upcoming DFS and PFS, we will update our capex projections upon release. More importantly, we expect the production targets to increase, which we believe to be a catalyst for Vulcan's share price. We confirm our PT with AUD 20.00, equivalent to EUR 13.71 and reiterate to BUY.
