Liontown Resources Ltd (ASX: LTR) shares are having a difficult session on Tuesday.
In afternoon trade, the lithium developer's shares are down a disappointing 8% to $1.16.
What's going on with Liontown shares today?
There are a couple of reasons why the company's shares are falling more than most today.
The first reason is weakness in the lithium industry on Tuesday. This has seen a number of ASX lithium stock tumble deep into the red.
Let's take a look at the state of play in the industry today:
- Core Lithium Ltd (ASX: CXO) shares are down 6.5%
- Lake Resources N.L. (ASX: LKE) shares are 7.5% lower
- Pilbara Minerals Ltd (ASX: PLS) shares have dropped 2.5%
- Sayona Mining Ltd (ASX: SYA) shares are down 5%
What else is weighing on its shares?
Also putting pressure on the lithium developer's shares today is news that it has been hit with a downgrade from a leading broker.
According to a note out of Citi, its analysts have downgraded Liontown's shares to a sell rating (from neutral) with a price target of $1.00.
Based on its current share price, this implies potential downside of almost 14% for investors over the next 12 months.
The broker made the move on valuation grounds after a strong rally in recent weeks took its shares beyond the broker's idea of fair value. It believes the market is currently pricing in a lithium spodumene price almost double current spot levels.
Today's decline is just another in a long run of declines that shareholders have had to endure. For example, following this latest weakness, the Liontown share price has now lost 55% of its value over the last six months.
