Liontown Resources Ltd (ASX: LTR) shares have endured a brutal 2024, down nearly 66% this year.
As we close out the calendar year, the stock has slipped nearly 28% into the red during the past month alone. It currently fetches 56 cents apiece.
For investors eyeing a potential rebound, some analysts reckon that 2025 could present opportunities if lithium prices rebound.
But is this speculative ASX lithium stock ready to make a comeback? Let's see.
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Liontown shares see red in 2024
Liontown shares have been on a downward spiral in 2024, weighed down by a combination of factors in the underlying lithium market.
Those producing the battery metal have been hit by an oversupply of lithium in the global market, combined with slow demand for electric vehicles (EVs). The ultimate 1-2-knockout of too much supply with too little demand
As a result, Liontown shares – along with the broader lithium basket – have been punished this year. Each name is trading well below previous highs.
Despite the downtrend, Liontown insiders have used the lower prices to increase their interest in the company.
Recent on-market purchases from Liontown directors Adrienne Parker and Shane McLeay saw the pair increase their holdings by 15,000 and 100,000 shares, respectfully.
Insider purchases often indicate confidence in the company's future. But it remains to be seen the impact of these moves.
Is 2025 the year for lithium?
The fate of Liontown shares in 2025 depends on the outcomes of the underlying lithium market.
Prices have been volatile this year. They have sunk hard since January and are "set to record an over 20% slump on the year", according to Trading Economics.
Meanwhile, according to The Motley Fool's Tristan Harrison, Citi analysts anticipate an oversupply in 2025 but suggest a potential recovery in the years to follow.
The firm sees small deficits re-emerging by 2026 or 2027. This could provide a tailwind for lithium prices and ASX-listed miners like Liontown.
Bell Potter has maintained its speculative buy rating on Liontown shares, setting a lofty price target of $1.40 apiece.
According to James Mickelboro of The Motley Fool, the broker highlighted the progress at Liontown's Kathleen Valley asset. It noted the ramp-up of spodumene production and recent shipments as positive indicators.
Looking to the consensus of analyst estimates, Liontown shares are rated a hold, according to CommSec.
Safe to say the outlook for the company is mixed for 2025.
Final thoughts
The future of Liontown shares in 2025 hinges mostly on the broader lithium market. Management has bold plans to scale up production, but this must wait on higher lithium prices.
This is endemic to the entire ASX lithium basket. Unless the market dynamics improve, prices could stay low.
Time will tell what this means for the company in 2025. But in my opinion, the outlook from experts is mixed for Liotntown shares in 2025.
