Liontown Resources Ltd (ASX: LTR) shares have been in the spotlight this week.
That's because the lithium miner released its quarterly update on Tuesday.
But what did analysts make of this update? Let's see what one leading broker is saying about the owner of the Kathleen Valley lithium operation.
Image source: Getty Images
What is the broker saying?
Bell Potter has been running the rule over the update and was relatively pleased with what it saw. It explains:
LTR reported Q4 FY25 production of 85.9kt, sales of 97.3kt (BP est. 89.2kt), revenues of $96m (BP est. $101m) and a closing cash position of $156m (prior quarter $173m; BP est. $175m). Cash flow from operations was $23m, the third consecutive positive quarter amid weak lithium markets.
2H FY25 production was marginally lower than guidance, with recoveries and production impacted by processing of lower grade stockpiles. However, an AISC of A$1,256/t SC6e was within the 2H FY25 guided range. Processing plant availability improved to 96% (prior quarter 91%) with ore throughput increasing 8% to 631kt, or around 90% of initial expected capacity.
In addition, the broker highlights that Liontown's FY 2026 guidance was largely in line with its expectations. It adds:
FY26 production is guided to 365-450kt and will be 2H weighted: In Q1 major plant maintenance will be completed and in 1H ore feed will continue as a blend of mostly open pit and lower grade ore sorted material; in 2H ore grades and recoveries should improve as the underground mine ramp-up gathers pace. FY26 guidance also includes AISC A$1,060-1,295/t (we estimate a midpoint of around US$890/t SC6e) and growth capital expenditure of $55-70m; all broadly in line with our estimates. From FY27, LTR point to a 20-25% drop in unit costs from FY26 levels.
Should you buy Liontown shares?
If you have a high tolerance for risk, then Bell Potter thinks that now could be a good time to invest.
According to the release, the broker has retained its speculative buy rating on Liontown's shares with an improved price target of $1.05 (from 90 cents).
Based on its current share price of 83 cents, this implies potential upside of almost 27% over the next 12 months.
Commenting on its recommendation, the broker said:
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.
