Why is the IGO share price being hit so hard today?

It's a tough day for ASX lithium shares today.

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The IGO Ltd (ASX: IGO) share price is down 4.3% to $12.10 amid a bad day for ASX lithium shares today.

There is no news out of the lithium and nickel miner today, and many of its peers are also taking tumbles.

This may be related to news out of the United States, which has led to the S&P/ASX All Ordinaries Index (ASX: XAO) falling 1.2%.

The US Fed Reserve has held interest rates steady, as expected.

However, Fed officials noted the likelihood of one more rate rise this year. They also suggested that interest rates would come down slower than anticipated in 2024 and 2025.

Let's take a snapshot of other ASX lithium shares today:

  • Sayona Mining Ltd (ASX: SYA) shares are down 12.4% to 9.2 cents
  • Allkem Ltd (ASX: AKE) shares are down 5.2% to $11.57
  • Pilbara Minerals Ltd (ASX: PLS) shares are down 3.3% to $4.01
  • Mineral Resources Ltd (ASX: MIN) shares are down 2.4% to $67.80
  • Core Lithium Ltd (ASX: CXO) shares are down 0.9% to 35 cents
  • Liontown Resources Ltd (ASX: LTR) shares are down 0.5% to $3.01

IGO share price falls amid downgrade from Morgan Stanley

IGO has not released any news to the market today.

However, Morgan Stanley has just downgraded the ASX 200 stock to underweight with a price target of $11.60.

This implies a potential downside of 4.1% over the next year.

Meanwhile, the broker has slapped an overweight rating on two other ASX All Ords mining stocks today.

Now, for opposing arguments…

Goldman Sachs has a different view on the IGO share price.

As my Fool colleague James reports today, the broker has a buy rating on IGO shares with a price target of $14.80. This implies a potential upside of 22% from current levels.

Goldman thinks the IGO share price is attractive at today's levels.

The broker also appreciates the low-cost profile of IGO's flagship Greenbushes lithium operation.

Goldman says:

IGO is a mining and exploration company focused on metals enabling the clean energy transition.

It has an indirect 49% ownership of Australia's first lithium hydroxide plant at Kwinana and ~25% of the world-class Greenbushes lithium spodumene mine, the largest and lowest cost hard rock lithium mine globally.

IGO also owns and operates the Nova nickel-copper-cobalt mine (100% share), Forrestania nickel (100%), and Cosmos nickel project (100%).

We see IGO's future facing commodity portfolio as defensive, and into a declining lithium price environment we expect low-cost assets with scale benefits will likely outperform on margin.

Motley Fool contributor Bronwyn Allen has positions in Core Lithium. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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.

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