After crashing 50%, could this ASX All Ords stock rebound?

Such low starting valuations could help.

| More on:
a tired and sad looking bulldog sits at an office desk with a pen an paper on it and a cup of coffee with his head resting on the desk as he gives a mournful look to the camera.

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

ASX All Ords stock Liontown Resources Ltd (ASX: LTR) has been heavily sold in 2024 and is down more than 50% this year to date.

Shareholders have experienced a rough ride since trading resumed in January, when shares stood at $1.69 apiece.

They finished the session on Tuesday at 82 cents following this year's steep decline.

But fear not young Jedi. The force could be strong with this one. Leading brokers see huge upside for the lithium stock if things start to improve. Can it rebound? Let's find out.

ASX All Ords share down hard in 2024

It's been a tumultuous year for the ASX All Ords stock. Both on the chart, and on the business front.

Most recently, the company released its first quarterly update since production kicked off at Kathleen Valley in Western Australia.

The miner reported output of over 28,000 dry metric tonnes (dmt) of spodumene concentrate, with an average grade of 5.2% lithium (Li2O) over an eight-week period.

Despite the company's enthusiasm, investors weren't as impressed. After nudging to around three-month highs of 92 cents apiece, the ASX All Ords stock has retreated to its current levels.

But it isn't all sad songs and broken hearts. Plenty of experts are still bullish on the stock.

Bell Potter has a speculative buy rating on Liontown shares, with a price target of $1.50. This implies an 83% upside potential over the next year if the stock performs as expected.

The broker cited Kathleen Valley's "strategic" nature, long lifespan, and secure position within a tier-one jurisdiction as reasons to stay optimistic.

In saying that , as with many speculative ASX All Ords stocks, the broker says that Liontown is best suited for investors with a high tolerance for risk.

Meanwhile, consensus rates the stock a hold, according to CommSec. This includes two buys, six holds, and five sell ratings on the stock.

What about fundamentals?

In its quarterly report, Liontown revealed the shipment of 10,831 dmt of spodumene concentrate, which has already reached an offtake customer. Revenue was realised after the quarter's end.

Additionally, Liontown has initiated a spot sales strategy for its uncontracted spodumene concentrate, achieving a reference price of US$802 per dmt for an upcoming shipment.

The company closed the quarter with a healthy cash balance of $263.1 million, providing a buffer as it continues scaling production.

CEO Tony Ottaviano celebrated the early milestones, stating, "Major milestones achieved this quarter included our first sale of spodumene concentrate, cementing Liontown's status as the world's newest major lithium producer."

Time will tell if Bell Potter is correct and if the stock will bounce back or not.

Foolish takeaway

This ASX All Ords stock has had a difficult year in 2024 and is down over 50%. But its fortunes could be set to change if one broker is correct.

Still, Liontown has to navigate a challenging lithium market, at a time when lithium demand is in question.

In the last 12 months, the stock has slipped more than 50% also.

Motley Fool contributor Zach Bristow 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 Scott Phillips.

More on Resources Shares

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Resources Shares

'I hate what I have done': Mineral Resources share price down as Ellison laments actions

Managing Director Chris Ellison says he deeply regrets the impact of his 'error of judgement'.

Read more »

A man in shirt and tie uses his mobile phone under water.
Resources Shares

The Lake Resources share price is sinking yet again. Here's why

The longer-term downtrend continues.

Read more »

Miner and company person analysing results of a mining company.
Resources Shares

With a P/E ratio of 6, is the Fortescue share price a bargain?

Let’s dig into whether Fortescue shares are good value or not, in my eyes.

Read more »

A man wearing a hard hat and high visibility vest looks out over a vast plain where heavy mining equipment can be seen in the background.
Resources Shares

Down 15% this year, where's the next stop for Rio Tinto shares?

Where to next for the miner?

Read more »

Miner and company person analysing results of a mining company.
Resources Shares

Can Pilbara Minerals shares cross the $3 mark?

Lithium stocks continue to split opinion.

Read more »

Female miner smiling in front of a mining vehicle as the Pilbara Minerals share price rises
Resources Shares

'Encouraging signs' for Fortescue shares heading into 2025

This leading investment expert forecasts brighter days ahead for Fortescue shares.

Read more »

Miner looking at a tablet.
Resources Shares

Are Mineral Resources shares now a buy amid CEO Chris Ellison's pending exit?

The company hosts its annual general meeting (AGM) on Thursday.

Read more »

Image from either construction, mining or the oil industry of a friendly worker.
Resources Shares

Overinvested in BHP shares? Here are 2 alternative ASX mining stocks to buy

Let’s dig into some other mining opportunities.

Read more »