Liontown Resources Ltd (ASX: LTR) shares are having a good start to the week.
At the time of writing, the lithium miner's shares are up 5.5% to 68 cents.
Despite this, the company's shares remain down a disappointing 47% since this time last year.
Is this a buying opportunity or should you keep your powder dry? Let's take a look at what a couple of brokers are saying about the lithium miner.
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Should you buy, hold, or sell Liontown shares?
Goldman Sachs has been looking over Liontown's half year results. Commenting on the result, the broker said:
LTR reported underlying EBITDA of A$66mn, ahead of expectations on the capitalising of commissioning costs, while D&A is expected to remain elevated through FY26 when the open pit reaches end of mine life. LTR noted 1H admin costs of ~A$20mn reflect some one-offs, and are expected to moderate to a ~A$35mnpa run-rate.
In response, Goldman has reaffirmed its neutral rating with a trimmed price target of 69 cents (from 71 cents). This is largely in line with where its shares trade today.
However, the broker advised that it is sticking with its rating and valuation for now, but acknowledges that there is major re-rating potential in the future. It adds:
We remain Neutral rated, with LTR trading in-line at ~0.95x NAV and implying ~US$1,160/t LT spodumene (peers at ~0.8x & ~US$1,050/t) though with significant potential valuation uplift from de-risking/valuation roll-forward. We note though that LTR retains a high valuation sensitivity to our LT lithium pricing, and our estimates include the planned expansion from ~CY30E and additional resource conversion, with a modest nominal value for growth/exploration upside.
Bullish broker
The team at Bell Potter is feeling more positive on the lithium miner and sees a lot of value in Liontown shares at current levels.
Commenting on the company's outlook statement, the broker said:
LTR's key outlook statements are unchanged: targeting the transition to full underground mining by the end of FY26; underground production stoping is expected to commence in Q4 FY25 with the open pit operating until Q3 FY26; recoveries are targeted to improve to 70% by Q3 FY26 and this rate has been achieved in recent campaigns; remaining Kathleen Valley capex is $11m.
In light of this, Bell Potter thinks investors with a high tolerance for risk should be buying shares today.
It has retained its speculative buy rating with a lowered price target of $1.25 (from $1.40). Based on the current Liontown share price, this implies potential upside of 84% over the next 12 months. The broker concludes:
LTR's 100% owned Kathleen Valley lithium project remains highly strategic in terms of scale, long project life and location in a tier-one mining jurisdiction. LTR has offtake contracts with top-tier EV and battery OEMs. Under our modelled assumptions, we expect that LTR is fully funded to free cash flow. LTR is an asset development company; our Speculative risk rating recognises this higher level of risk.
