Liontown Resources Ltd (ASX: LTR) shares have gained 4% so far this week.
Shares in the ASX lithium stock are currently trading for $1.40 apiece, which gives it a market cap of $3.1 billion.
But Stuart Howe, an analyst at Bell Potter, believes Liontown shares could have much further to run.
The broker has a speculative buy rating on the stock, with a price target of $2.81 per share.
That's 101% above the current Liontown share price.
What's happening with the ASX lithium stock?
Liontown is currently developing its Kathleen Valley Lithium Project, located in Western Australia.
Lithium mineralisation at the project is hosted within spodumene-bearing pegmatite dykes.
The miner expects first production at the project in mid-2024 with a capacity between three to four million tonnes per year.
In the company's quarterly results, released 31 January, Liontown did note that it was facing industry-wide cost escalations. However, its balance sheet was strong, with a cash balance of $384 million as at 31 December and an undrawn $300 million debt facility with Ford Motor Company.
Liontown shares closed down 5.7% on the day it reported.
Commenting on the company's progress towards production, managing director Tony Ottaviano said:
The December quarter marked a significant period of progress for Liontown with construction activity stepping up on-site at Kathleen Valley, key contracts awarded and new personnel joining us as we continued to build our high calibre team.
Ottaviano added, "The rapid and efficient achievement of so many early critical path construction milestones set us up for the successful delivery of the project."
While first production is still likely more than a year away, Liontown shares could benefit in the meantime from an alternate source of revenue. The company is progressing with a Direct Shipping Ore (DSO) opportunity. This will enable it to sell material that wasn't originally expected to be processed.
How have Liontown shares been performing?
As you can see on the chart below, Liontown shares are down 7% over the past 12 months.
Longer-term, the ASX lithium stock has gained a whopping 3,400% over five years.
