Core Lithium share price hits a multi-year low: Will the tide change soon?

Are analysts now seeing value emerge from the lithium miner's shares?

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It was another disappointing session for the Core Lithium Ltd (ASX: CXO) share price.

During Friday's trade, the lithium miner's shares tumbled to a new multi-year low of 9 cents.

And while it ended the day a fraction higher at 9.2 cents, this doesn't change much for shareholders.

Over the last 12 months, the Core Lithium share price is down over 90%.

To put that into context, if you had invested $20,000 into its shares a year ago, you would have just $2,000 left.

That's $18,000 gone seemingly in a blink of an eye.

Why is the Core Lithium share price at a multi-year low?

The decline in the company's share price over the last 12 months shouldn't come as a big surprise. I have warned for some time now that its shares could crash deep into the red.

And while I hadn't expected such a large decline, in hindsight it isn't surprising given what has transpired over the period.

With lithium prices at low levels and some analysts forecasting them to remain that way for some time due to a potential surplus of the white metal, it has become unprofitable for Core Lithium to continue mining operations.

As a result, it has suspended its mining activities and there's no word on when things will change.

If prices remain at current levels for the next three years, it could conceivably mean that no shovels are in the ground at the Finniss Operation during that time.

Though, it is worth highlighting that management has revealed that it is looking beyond lithium. So, there's potential for the company to expand into other metals or minerals that are experiencing stronger pricing.

What are analysts saying?

As things stand, it seems that even the most bearish analysts are starting to see value emerge from the Core Lithium share price.

For example, Goldman Sachs has a sell rating on its shares but a price target of 11 cents. This implies potential upside of 20% for investors from current levels.

But whether Goldman believes that is enough of a reward to justify the risk of investing in the company at this stage, remains to be seen. So, don't count on the broker adjusting its recommendation in a hurry.

Elsewhere, Macquarie currently has a neutral rating and 15 cents price target on the lithium stock and Citi rates it as a sell with a 9 cents price target.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. 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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