The Liontown Resources Ltd (ASX: LTR) share price went on a huge rollercoaster ride during 2023 when it received a takeover offer, and then the bidder walked away. This ASX lithium share could be an interesting one to watch in 2024.
Liontown Resources isn't immune to weaker lithium prices, as we've seen over the last several months.
So, let's take a look at what an expert thinks of the company.
Outlook
The broker UBS points out that Liontown is on track for its first production in the middle of 2024. UBS said the mining ramp-up continues in the pit, and Byrnecut, the underground contractor, has started the underground decline. However, it said the processing plant remained "the critical path for first production in mid-CY24".
At the end of October, the project was 50% complete, with 90% of the increased capital expenditure (A$951 million) committed. The company recently completed its $376 million capital raising after issuing new Liontown Resources shares, adding to $285 million cash it had at 30 September 2023 and A$760 million of new debt.
At the moment, for its model, UBS has forecast the ASX lithium share is going to ramp up over FY25 delivering around 70kt spodumene before achieving 295kt in FY26, 445kt in FY27, 585kt in FY28 and around 750kt in FY29.
The broker suggests Liontown Resources is "well funded" for the Kathleen Valley build and "potentially be ramping up into an improving lithium market". UBS suggests Liontown Resources is "relatively less impacted by current weak spodumene prices than peers."
UBS said the key value drivers for Liontown Resources remained "if long-term volumes are achievable" and costs were managed.
Forecasts
The broker doesn't think Liontown Resources is going to start making a profit until FY26. In FY27, it could generate 8 cents of earnings per share (EPS) and in FY28, it might make EPS of 13 cents.
In terms of the Liontown Resources share price, UBS has a price target of $1.50 – that's where the broker thinks the share price will be in 12 months. This implies it could rise by just under 10%, though it's just a guess.
The broker is currently neutral on the business.
