Liontown Resources Ltd (ASX: LTR) shares have been strong performers in recent weeks.
So much so, the lithium miner's shares are up 33% since this time last month.
As a comparison, the benchmark ASX 200 index is only up 2% over the same period.
Does this make it too late to invest in Liontown? Let's see what analysts at Macquarie Group Ltd (ASX: MQG) are saying ahead of the release of the lithium stock's quarterly update.
What is the broker saying?
Macquarie has been looking ahead to Liontown's quarterly update and believes the company could deliver production ahead of expectations. It said:
Our 1QFY26 production estimates are 4% above VA consensus at 73kt, with FY26 total output of 405kt at the mid-point of 365-450kt guidance.
Macquarie expects this to underpin spodumene sales of 73kt (down 25% quarter on quarter) and be achieved with an all-in sustaining cost (AISC) of $1,543 a tonne (down 1%). It adds:
Quarter on quarter, we forecast 15% decrease in spodumene production which result in a largely flat AISC given continued capital investment underground. We also expect a continued decline in growth capex, down 18% to A$25m in the Sep quarter.
Should you invest?
Unfortunately, Macquarie isn't a buyer of Liontown shares at current levels. In fact, despite forecasting production ahead of consensus estimates, the broker thinks investors should be selling its shares.
According to the note, Macquarie has retained its underperform rating and 65 cents price target.
Based on its current share price of $1.17, this implies potential downside of approximately 44% over the next 12 months.
The broker prefers Elevra Lithium Ltd (ASX: ELV), which is the name of the US-based lithium miner that was formed when Sayona Mining and Piedmont Lithium merged.
The note reveals that Macquarie has a buy rating and $5.50 price target on its shares. This suggests that upside of 17% is possible over the next 12 months based on its current share price of $4.70.
And while Macquarie also has an outperform rating on Pilbara Minerals Ltd (ASX: PLS) shares, its price target of $2.75 offers only modest upside from current levels.
The same could also be said for IGO Ltd (ASX: IGO), which Macquarie is also feeling positive about. It has an outperform rating and $5.75 price target on this battery materials miner's shares. This suggests that upside of under 5% is possible between now and this time next year.
