The Liontown (ASX:LTR) share price has shed 22% this month. Is it a bargain?

Are Liontown shares going to roar back to life in 2022?
The post The Liontown (ASX:LTR) share price has shed 22% this month. Is it a bargain? appeared first on The Motley Fool Australia. –

The Liontown Resources Limited (ASX: LTR) share price is having another difficult day.

In afternoon trade, the lithium developer’s shares are down 3.5% to $1.50.

This means the Liontown share price is now down 22% since the start of December.

Is the Liontown share price a bargain buy now?

While the recent weakness in the Liontown share price is disappointing for shareholders, it could be a buying opportunity for non-shareholders.

This month the team at Bell Potter named Liontown as one of its top picks for 2022 and is predicting significant upside for its shares.

According to the note, the broker has a (speculative) buy rating and $2.15 price target on the company’s shares. Based on the current Liontown share price, this implies potential upside of 43% over the next 12 months.

Why is Bell Potter so bullish?

Bell Potter is a fan of Liontown due to its exposure to lithium through its Kathleen Valley Lithium Project in Western Australia. The broker notes that as its future offtake is uncommitted, it is well-placed to take advantage of supply shortages as decarbonisation policies are enacted.

In respect to the lithium market, Bell Potter commented: “Surging lithium commodity prices in 2021 have highlighted an emerging supply-demand deficit. This deficit is expected to widen with the ongoing uptake of electric vehicles and battery storage systems. The value of uncontracted lithium supply is evidenced by heightened sector corporate activity and record spot prices achieved by Australian spodumene producers.”

With that in mind, the broker said: “LTR is positioned to become a key supplier of battery raw materials and is now capable of funding Kathleen Valley’s initial development capital. The project DFS highlighted production of 658ktpa SC6 with potential for conversion into 86ktpa lithium hydroxide (75ktpa lithium carbonate equivalent, LCE). LTR is independent, debt free and with all offtake uncommitted it is in a strong strategic position in a market for lithium facing supply shortages as decarbonisation policies are enacted. Key catalysts are now signing product offtake contracts, project permitting and commencing project development.”

All in all, this could make the Liontown share price great value after its recent pullback.

The post The Liontown (ASX:LTR) share price has shed 22% this month. Is it a bargain? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Liontown right now?

Before you consider Liontown, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Liontown wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Bell Potter names the best ASX mining shares to buy in 2022

Here are the top 10 ASX shares today

These were the 5 best-performing ASX hydrogen shares of November

Why Afterpay, Liontown, Northern Star, and Xero shares are falling

Why the Liontown Resources (ASX:LTR) share price is sinking 13% today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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