IGO Ltd (ASX: IGO) shares have come under pressure with the rest of the market on Thursday.
In morning trade, the battery materials miner's shares are down over 2% to $14.77.
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IGO shares down again
This latest decline means that IGO's shares are now down 12% since this time last week. That's despite the company announcing its quarterly update earlier this week and revealing stellar earnings growth.
For the three months ended 30 September, IGO reported a 54% increase in underlying EBITDA to a record $398 million and a massive 136% jump in net profit after tax to $253 million.
This strong growth was underpinned by record quarterly spodumene production at Greenbushes and record sales revenue from its nickel business following the contribution from Forrestania.
Is this a buying opportunity?
According to a note out of Citi, its analysts think investors should keep their powder dry for the time being.
In response to the update, the broker downgraded IGO's shares to a neutral rating with an improved price target of $15.20.
Its analysts believe the IGO share price is fair value at 1.1x NAV and 6x EBITDA. The broker commented:
SepQ overshadowed by the unexpected death of MD & CEO Peter Bradford. New news were: i) Kwinana (lithium hydroxide) train 1 commercial production expected end of CY23; ii) total capex at Cosmos (Ni) now expected to be double at ~A$810m. SepQ highlight was Greenbushes which more than doubled underlying earnings QoQ. Net debt reduced by A$137m to A$396m. We lift our TP by $1.20/sh to A$15.20/sh and move to Neutral. IGO is now trading on ~1.1xP/NAV and FY24 EV/EBITDA +6x. We expect nickel prices to move lower and lithium to track more or less sideways in the near-term.
Though, that hasn't stopped one insider from topping up with a large purchase this week. A change of director's interest notice reveals that its non-executive director, Justin Osborne, picked up 10,000 shares for a total consideration of $148,350 on 1 November.
