The Core Lithium share is down 27% in March: What's next?

Times have been hard for this lithium miner's shareholders. Will things improve?

| More on:
a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There haven't been many months that have been positive for the Core Lithium Ltd (ASX: CXO) share price lately.

And barring an absolute miracle this afternoon, March certainly won't be one of them.

As things stand, the Core Lithium share price is on course to record a monthly decline of 27%.

Why is the Core Lithium share price being hammered again?

It has been an eventful month for this lithium miner, but sadly not in a good way.

This month, the lithium miner was dumped out of the ASX 200 index, saw its CEO exit immediately out of the blue, and posted a big half-year loss.

In respect to the latter, Core Lithium reported first-half revenue of $134.8 million but a loss after tax of $167.6 million.

This reflects a 75% decline in its spodumene concentrate realised price to US$2,098 per tonne, its decision to suspend production, a non-cash impairment of $119.6 million, and provisions for onerous contracts of $27.6 million.

What's next?

The bad news is that the few brokers that still cover the company don't see value in the Core Lithium share price despite its fall from grace.

For example, earlier this month, Citi retained its sell rating and slashed its price target down to 11 cents.

Goldman Sachs also remains bearish. Its analysts reiterated their sell rating and cut their price target to 13 cents.

Goldman appears to believe that lithium prices will stay at levels that are not workable for Core Lithium for some time to come.

As a result, the broker is forecasting revenue of just $18 million in FY 2025 and then $34 million in FY 2026. This compares unfavourably to the revenue of $134.8 million it generated during the first six months of FY 2024.

These certainly are tough times for Core Lithium and its share price. If there isn't a significant uptick in lithium prices in the near term, the next couple of years could be very bleak for shareholders.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 positions in and has recommended Goldman Sachs Group. 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 Scott Phillips.

More on Materials Shares

A group of miners in hard hats sitting in a mine chatting on a break as ASX coal shares perform well today
Materials Shares

Down but not out: Can these ASX mining shares bounce back?

Here’s what one broker is predicting for Australia’s largest mining companies. 

Read more »

Broker analysing the share price.
Materials Shares

Buy, hold, or sell? Broker's verdict on 3 ASX 200 materials shares

Materials was one of four market sectors that weakened in overall value in FY25.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Materials Shares

Why is this ASX mining stock crashing 14% today?

Let's see what is causing investors to hit the sell button on Monday.

Read more »

Three miners stand together at a mine site studying documents with equipment in the background
Materials Shares

$10,000 invested in BHP shares in FY25 is now worth

Did the Big Australian outperform or underperform during the last financial year?

Read more »

A male investor sits at his desk pondering at his laptop screen with a piece of paper in his hand.
Share Market News

Why did Macquarie just downgrade Liontown resources shares?

Here’s what the broker had to say about this materials company. 

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Materials Shares

Why did Macquarie downgrade Mineral Resources shares?

The broker is no longer bullish on this mining and mining services company.

Read more »

A bricklayer peers over the top of a brick wall he is laying with a level measuring tool on top and looks critically at the work he is carrying out.
Materials Shares

Brickworks shares rise 1% on trading update

Investors seem delighted by a new update from Brickworks.

Read more »

A man wearing a shirt, tie and hard hat sits in an office and marks dates in his diary.
Materials Shares

Does Macquarie prefer Rio or BHP shares today?

Let's find out which mining giant is the better pick right now according to the broker.

Read more »