How has the Liontown share price rocketed 15% in a week?

There's one factor that might explain Liontown's explosive performance of late.

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It's been a decent week for the S&P/ASX 200 Index (ASX: XJO). Since last Thursday, the ASX 200 has gained a healthy 1.05%. But that's nothing compared to the gains of the Liontown Resources Ltd (ASX: LTR) share price.

Liontown shares have rocketed over the past five trading days. This ASX 200 lithium stock opened at $1.17 a share last Thursday. But today, Liontown is swapping hands for $1.34 a share at the time of writing, up a rosy 3.47% for the day thus far. This means that Liontown shares have gained an impressive 14.53% over the past week or so.

Even the mathematically challenged would recognise what a significant move this is for Liontown's investors.

But how has this lithium stock pulled such an eye-watering gain out of its proverbial hat?

Unfortunately, it's not immediately obvious why Liontown shares have exploded so dramatically in value over the past week. There have been no significant pieces of news or ASX announcements out of the company whatsoever over this period.

In fact, there hasn't been a price-sensitive ASX filing from Liontown since 13 March last month.

How have Liontown shares put on 15% in just one week?

However, there is something we can point to that might have been influencing the Liontown share price of late.

Earlier this month, my Fool colleague James covered a very positive outlook on Liontown shares indeed, coming from ASX broker Bell Potter.

Bell Potter was so impressed with Liontown's securement of a $550 million funding facility last month that it reaffirmed a 'speculative buy' rating on the company. That came with a drastically increased 12-month share price target of $1.90 for the Liontown share price.

If realised, this would see investors enjoy even more gains from Liontown shares – worth almost 42% over the coming year.

Bell Potter cited Liontown's funding arrangement as the catalyst for its improved share price target. The broker stated that "the new facility provides funding headroom of around A$150m above [Liontown's Kathleen Valley Lithium Project]'s remaining capex and working capital requirements".

In addition, Bell Potter described the Kathleen Valley project as "highly strategic in terms of its stage of development, long mine life and location". It also cited the significant involvement of Gina Rinehart's Hancock Prospecting as a positive. Hancock currently has a 19.9% in Liontown.

However, the broker noted that its "speculative risk rating recognises this higher level of risk" involved in investing in an "asset development company" like Liontown.

Even so, this bullish outlook from one of the ASX's major brokers could well be what has caused this notable uptick in the Liontown share price over the past week. Let's see if this momentum continues.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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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