Liontown Ltd (ASX: LTR) shares have been strong performers over the past 12 months.
During this time, the lithium miner's shares have risen 35%.
Despite this, one leading broker believes that the company's shares could be dirt cheap.
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What is the broker saying?
According to a note out of Bell Potter, its analysts felt that Liontown delivered a "solid" result in FY 2026. The broker said:
LTR reported FY26 underlying EBITDA of $147m (BP est. $222m) and NPAT of $14m (BP est. -$3m). Statutory NPAT was $93m, includes a net -$44.3m tax effected charge for fair value movements and FX gain related to the convertible notes issued to LG Energy Solution, and the recognition of a $112.9m deferred tax asset for tax losses carried forward from prior years. LTR did not declare a dividend, as expected.
The FY26 result was symptomatic of the Kathleen Valley ramp-up, with high depreciation associated with completing the open pit in late 2025. As previously reported, LTR finished FY26 with cash of $561m and debt of $369m (excluding leases) implying a net cash position of $192m.
Looking ahead, Bell Potter highlights that management is working towards a final investment decision (FID) for the Kathleen Valley mine and processing plant expansion, with a decision due in the near term. It said:
LTR intends to take a formal Final Investment Decision (FID) on the Kathleen Valley mine and processing plant expansion in late September 2026. The expansion is designed to lift underground mining and processing throughput from 2.8Mtpa to 4.0Mtpa, thereby lifting concentrate production capacity from around 500ktpa to over 700ktpa. In today's release, LTR reiterated FID remains on track for end of Q1 FY27.
Are Liontown shares dirt cheap?
Bell Potter believes that Liontown shares are unnecessarily cheap, highlighting that its enterprise value (EV) is trading at a level not seen since lithium prices were significantly cheaper and its debt load was higher. It said:
We still believe that LTR's EV is lagging the recent recovery in lithium markets and expected tight fundamentals. The last time LTR was trading at its current EV (early December 2025), SC6 prices were US$1,150/t and net debt was $274m. Since this date. Since then, the Kathleen Valley underground ramp-up has been further derisked and spot SC6 prices are above US$2,300/t.
While we expect lithium markets will be volatile, market fundamentals remain strong. Over FY27, LTR will continue to ramp up and de-risk Kathleen Valley, a highly strategic asset in terms of scale, long project life and location in a tier-one mining jurisdiction.
In response to the company's results, the broker has retained its buy rating and $1.90 price target on Liontown's shares.
Based on its current share price of $1.23, this implies potential upside of approximately 55% for investors over the next 12 months.
