Bell Potter has finally revised LTR's financial model projections to downgrade SC prices
Lithium price outlook downgraded
We have downgraded our lithium price outlook: Spodumene concentrate 6% Li2O now US$1,050/t in 2025 (previously US$1,400/t) trending higher to LT US$1,500/t in 2028 (previously US$1,600/t); Lithium carbonate now US$12,500/t in 2025 (previously US$20,000/t) trending higher to LT US$20,000/t in 2028 (previously US$22,500/t). The downgrades are based on our updated lithium supply-demand outlook, now expecting supply deficits to emerge in 2027 (previously 2026). The result is marginal cost supported prices over 2025 before higher incentive prices from 2026
So LTR is projected to make a significant loss of $238mil in FY25 at the projected SC6 price of just over US $1000. So an improvement from $770-780 level today to $1000 is still not good enough for LTR.
And if optimistic Bell Potter can be positive to forecast a $1150 SC6 price for 2026 assuming no recession, for current valuation of $2B, that gives an FY2026 PE forecast of 11x. Which isn't too bad for those prepared to wait that long provided
1. No recession throughout 2024-2026
2. SC6 price can scale higher from $770 to $1150 by 2026
Still, the spectre of hefty losses for 2025 unless LTR goes into C&M, would be short to medium term rather damaging prospect for LTR stock price.
