It certainly has been an eventful couple of days for the Core Lithium Ltd (ASX: CXO) share price.
After starting the week at 87 cents, the lithium miner's shares sank to a 52-week low of 61.5 cents on Tuesday morning.
However, an intraday comeback during yesterday's session means they recovered a good portion of their declines to close the session at 70 cents.
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What's going on with the Core Lithium share price?
Investors have been hitting the sell button this week after the company provided production and cost guidance for FY 2024 and FY 2025.
As you might have guessed from the Core Lithium share price performance, that guidance fell well short of expectations. This was due partly to teething issues at the Finniss Lithium Project.
Core Lithium expects 80,000 to 90,000 tonnes of spodumene production in FY 2024 and then a decline in volumes in FY 2025. Whereas analysts at Goldman Sachs were forecasting 134,000 tonnes and then 190,000 tonnes, respectively.
Is this a buying opportunity?
While Goldman Sachs isn't in a rush to buy Core Lithium's shares, it does see a touch of value in them at the current level.
Following the update, the broker has retained its sell rating and cut its price target by 21% from 95 cents to 75 cents. This implies a potential upside of approximately 7% from current levels. Which isn't bad for a sell rating!
Goldman has been running the rule over the update and amended its estimates accordingly. The good news for shareholders is that the broker feels that production could grow in FY 2025 despite the company's guidance.
It feels that management may have been too conservative with its weather disruption estimates. There's also potential for BP33 to boost production once complete. Goldman explains:
With respect to the outlook for FY25, CXO expects monthly mining and processing rates to be above FY24 levels, however, overall production in FY25 is expected to be below FY24, or down >50% vs. prior GSe/consensus (though excludes any BP33 contribution) due to a currently anticipated three-month gap in ore supply from the mine and processing plant capacity constraints result in a ROM pad stockpile building at the conclusion of FY25 (while mine grades are also expected to decline to 1.35% to FY25). We continue to expect some production growth in FY25, though lower our FY25 estimate from ~190kt to 110kt (prior consensus 174kt), with the view that mine disruptions from wet weather may be less severe vs. FY23.
