The Leo Lithium Ltd (ASX: LLL) share price could be in for a major pop after its recent drop, if one top broker is to be believed.
Shares in the ASX newbie have tumbled 31% from its initial public offering (IPO) price, wherein new stock was handed out for 70 cents apiece. The company came to be after Firefinch Ltd (ASX: FFX) spun out its lithium assets in June.
Right now, the Leo Lithium share price is trading at 48 cents.
But its recent suffering might be short-lived. Let's take a look at the whopping price target one top broker has put on the ASX lithium share.
Could ASX newbie Leo Lithium shares soar 150%?
The Leo Lithium share price could be in for a huge run on the ASX, according to Barrenjoey.
The broker recently initiated coverage of the shiny new lithium share, slapping it with an overweight rating and a $1.20 price target, The Australian reports.
That represents a potential 150% upside on its current price.
The company holds one of the world's largest undeveloped high-quality spodumene deposits – the Goulamina Lithium Project.
The project is located in Mali. It's to be developed by Leo Lithium and joint venture partner Ganfeng. Its production is expected to kick off in 2024.
Drilling is also ongoing at the project. The ASX lithium stock recently announced drilling results from the project's Danaya deposit, revealing high-grade, thick intercepts and multiple wide mineralised pegmatite zones.
Leo Lithium held $71.5 million of cash at the end of the September quarter, while the Goulamina joint venture housed US$125.5 million. The company also has a US$40 million debt agreement with Gangfeng.
The lithium share is currently trading for 9% less than it was after a disastrous tumble on its ASX float.
In the meantime, however, it peaked at a record high of 81 cents. It also slumped to a record low of 36 cents.
