The Core Lithium Ltd (ASX: CXO) share price is up 1% in early trade, at $1.19 per share.
This comes after some hefty losses earlier in the week for the ASX lithium stock, including a 4.4% loss on Monday and yesterday's 9.9% plunge.
After surging 196% this year between 4 January and its 14 November peak, this begs the question, has the Core Lithium share price gotten ahead of itself?
Has the Core Lithium share price 'run ahead of fundamentals'?
Time will prove the ultimate judge of whether investor overexuberance has pushed the lithium miner into overvalued territory.
But after polishing their crystal ball, analysts at Goldman Sachs offered a rather bearish near-term outlook for the Core Lithium share price.
Part of that is based on their expectations that lithium prices while remaining high in the first half of 2023, will decline in the second half.
Spodumene production at Core Lithium's Finniss project, in the Northern Territory, is meant to commence in the first half of 2023. But Goldman notes the "upside case is unlikely to be achieved before lithium prices decline".
The broker also notes (quoted by The Australian):
The policy stimulus in China to boost the domestic electric vehicle industry has pulled forward battery metals demand to this year which we expected in 2023-24.
The team believes the battery maker overcapacity, on the back of accelerated capacity build-out amid a decelerating growth of new energy vehicles sales will eventually weigh on lithium prices and expect this dynamic to start playing out in 2H23.
As for their outlook on the Core Lithium share price, Goldman's analysts said, "We see Core Lithium as having run ahead of fundamentals."
Goldman Sachs initiated coverage on the miner's shares with a sell rating and a $1 price target.
How has Core Lithium performed longer-term
Despite the sizeable retrace over the past few weeks, as you can see in the chart below, the Core Lithium share price is still up a whopping 128% over the past 12 months.
For some context, the S&P/ASX 200 Index (ASX: XJO) is down 3% over the full year.
