The Core Lithium share price just hit a 52-week low. Time to pounce?

This lithium miner's shares have been sold off again on Thursday. So much so, they just hit a 52-week low.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It has been another difficult session for the Core Lithium Ltd (ASX: CXO) share price.

In morning trade, the lithium miner's shares dropped over 6% to a 52-week low of 80.5 cents.

The Core Lithium share price has recovered a touch since then but currently remains down 3.5% at 83 cents.

A man slumps crankily over his morning coffee as it pours with rain outside.

Image source: Getty Images

Should you take advantage of the weakness in the Core Lithium share price?

Regular readers may be aware that I've been warning about the potential for the Core Lithium share price to fall materially in recent months. This was due to its valuation in comparison to peers.

Since the release of the aforementioned article, the lithium miner's shares have crashed 35%. So, is now the time to invest?

The good news is that the company's shares are now trading lower than the valuations of even the most bearish of brokers.

For example, both Citi and Goldman Sachs currently have sell ratings and 90 cents price targets on the company's shares. This implies almost 8.5% upside from current levels, which isn't bad for a sell rating!

In addition, Macquarie continues to see significantly more value in the Core Lithium's shares. As recently as last week, its analysts retained their outperform rating and $1.30 price target on them.

While seeing the Core Lithium share price rise to this level seems unlikely in the current environment, if it were to do so, it would mean a massive 57% return for investors buying in at today's price.

What could get its shares rising again?

Given how lithium shares are high up on the risk curve, recent market volatility has hit them hard.

If things calm down and global economic growth and banking system concerns ease, then it would likely give its shares a boost. In addition, a reversal in recent lithium price weakness would be very welcome for the industry and could give its shares a lift.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

Man looking happy and excited as he looks at his mobile phone.
Materials Shares

BHP shares charge higher following third-quarter update

Let's see how the Big Australian performed during the quarter.

Read more »

A man wearing a hard hat stands in front of heavy mining machinery with a serious look on his face.
Materials Shares

Boom or bust: What's next for Lynas shares?

Can the miner push its rally beyond the 133% annual gain?

Read more »

Two men laughing while bouncing on bouncy balls.
Materials Shares

James Hardie shares jump 17%: Is this the beginning of a recovery we've been waiting for?

The shares have now rebounded from a four-month low in late March.

Read more »

Man on a ladder drawing an increasing line on a chalk board, symbolising a rising share price.
Materials Shares

This ASX stock is up 74% in a month. Here's why it's ripping 9% higher today

Sunrise shares are capping a rapid monthly rally.

Read more »

A small child in a sandpit holds a handful of sand above his head and lets it trickle through his fingers.
Materials Shares

Lynas shares slip after update: here's what's turning heads

Lynas shares dip after releasing its March quarterly update.

Read more »

A group of people in suits and hard hats celebrate the rising share price with champagne.
Materials Shares

Rio Tinto shares close in on record high following strong Q1 update

Australia's second-largest miner has handed in its report card on Tuesday.

Read more »

a small boy dressed in a superhero outfit soars into the sky with a graphic backdrop of a cityscape.
Materials Shares

This ASX lithium stock just exploded 12%. Here's what sparked it

European Lithium shares rocket 12% as investors react to latest announcement.

Read more »

Sell buy and hold on a digital screen with a man pointing at the sell square.
Broker Notes

Up 130% in a year, are Lynas Rare Earths shares still a good buy today?

Lynas Rare Earths shares have more than doubled ASX investors’ money in a year. Is there still time to buy?

Read more »