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.
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.
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.
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.
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