Liontown Resources Ltd (ASX: LTR) is a lithium mining company with key projects across Western Australia.
Yesterday, broker Macquarie released a report, which provided snapshot of the lithium market in Australia, and evaluated key stakeholders including Liontown.
The lithium miner has seen its share price rise by more than 10% already in 2025.
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Lithium outlook
According to Macquarie, lithium prices have not stabilised as expected in 2025.
In early CY25, we anticipated the lithium market could find support at RMB70k/t LCE, which is close to the break-even point for several integrated lithium producers in China.
However prices have pushed through this level and are now below RMB65k/t LCE. Prices are below the 4th quartile of the cost curve, which could induce supply responses.
The broker also noted expectations for very strong demand growth. Since a large share of lithium comes from Chinese mines, and many Chinese companies are vertically integrated — their mining losses can be offset by profits further down the supply chain.
What does this mean for Liontown Resources?
Macquarie noted that the growth in share price since April was a "surprise".
Despite its solid production and 64% recovery at Kathleen Valley in 3QFY25, the miner consumed more cash, ending with ~A$170m by the end of March. Liquidity management remains a near-term focus as we anticipate lithium prices could remain subdued for the rest of CY25.
Essentially, even though the company had strong production and a recovery at its Kathleen Valley site, managing cash flow is now a short-term priority, especially since lithium prices are expected to stay low through the rest of 2025.
The broker placed a "neutral" rating and price target of $0.65, indicating it is already trading near fair value.
Is there value elsewhere in the lithium market?
According to the same report, there is opportunity elsewhere in the sector.
The broker placed a one year price target of $2.40 on Pilbara Minerals Ltd (ASX: PLS) which indicates more than 70% upside.
Macquarie reinforced Pilbara Minerals remains a high quality lithium exposure which has underperformed both AU and international peers.
This would be a strong bounce back for PLS share price which is down more than 37% in 2025.
According to the report, there is also upside for Sayona Mining Ltd (ASX: SYA) and Mineral Resources Ltd (ASX: MIN).
Both of these lithium miners have seen share price falls of more than 60% over the past year.
