Liontown Resources Ltd (ASX: LTR) shares are well and truly on form on Thursday.
In afternoon trade, the lithium developer's shares are up 9% to $1.38.
Investors have been buying Liontown and other ASX lithium shares today after the US Federal Reserve suggested that there could be three interest rate cuts next year.
Lower rates could potentially ease the burden on consumers and support electric vehicle sales. Investors may believe this could boost demand for lithium and cause a rebound in prices.
Can Liontown shares continue to rise?
The question now is whether this positive run can continue in the run-up to Christmas. Let's see what could happen.
Firstly, predicting short-term movements is near impossible. However, that doesn't mean we can't see what could be possible.
One positive is that, as we have seen today and plenty of times this year, Liontown shares can cover a lot of ground in a short period of time.
To go from where it currently trades to $1.50, for example, would need another gain of approximately 9%. Clearly, that is possible based purely on today's session. But do analysts believe its shares can get there?
More good news is that Bell Potter says that its shares can reach that level (and much higher).
Its analysts currently have a speculative buy rating and a $2.75 price target on the lithium developer's shares. This implies a potential upside of almost 100% for investors over the next 12 months.
The broker recently commented:
LTR owns the Kathleen Valley (KV) lithium project in Western Australia. KV is in development and set to commence production in mid-2024, supplying into Ford, Tesla and LG Energy Solution offtake agreements. The company is funded to complete KV and has a strong cash buffer over and above remaining development and working capital requirements. We expect lithium market sentiment to improve into 2024 as EV supply chain inventories normalise. KV is highly strategic in terms of being large scale and located in a stable mining jurisdiction.
