ASX 200 share IGO Ltd (ASX: IGO) has copped a beating in the last three months, sliding by a staggering 35%.
At the time of writing on Friday, shares in the lithium and nickel miner are trading for $5.16, their lowest range since May.
After this decline, is this ASX 200 share now a bargain, or is there more downside to come? Let's see what the experts say.
ASX 200 share slides on asset sales, lithium weakness
IGO announced this week it has entered an exclusivity agreement with Medallion Metals Ltd (ASX: MM8) to negotiate the sale of its Cosmic Boy processing facility. The deal includes the associated infrastructure of the Forrestania Nickel Project.
This follows the completion of nickel processing at Forrestania, where the ASX 200 share has been winding down operations due to the depletion of nickel reserves after 18 years of production.
The proposed transaction could see Medallion paying up to $50 million. This includes an initial cash payment of $15 million.
IGO will retain lithium and nickel rights at Forrestania. Whereas Medallion sees the deal as a "transformational opportunity".
Zooming out, the sell-off in IGO shares can be attributed to broader headwinds in the battery materials sector, particularly the decline in lithium prices.
Being a large lithium miner, the ASX 200 share has felt the pinch, with its stock erasing over 60% of its value in the past year.
However, some analysts see this decline as an opportunity.
Is IGO a bargain buy?
Goldman Sachs recently highlighted that despite the challenging environment, IGO's quarterly earnings outpaced consensus estimates.
It says the ASX 200 share continues to generate substantial cash flow. Especially because of its low-cost lithium operations at the Greenbushes mine.
Ongoing expansions at Greenbushes are expected to increase production capacity.
This, it says, positions IGO well to reinvest in growth or pay dividends, with Goldman predicting a 7 cent final dividend for FY24.
It has a buy rating on IGO with a price target of $6.75 apiece, implying a potential upside of 30% from the current share price.
Meanwhile, according to CommSec, the consensus of analyst estimates recommends IGO as a hold. This is supported by seven buy ratings, six hold ratings, and four sell ratings, respectively.
Based on this spread, it is safe to say that while the consensus is buy, broker opinions are still reasonably split. This may or may not make the ASX 200 share a bargain buy.
Foolish takeout
While the ASX 200 share has faced significant challenges, some experts think the recent sell-off may have been overdone.
But that view isn't shared equally. The consensus view is a hold on IGO.
As always, conduct your own due diligence and consult professional advice when necessary.
