IONEER LIMITED (INR)
Share Price Analysis and Chart

09/01/2024

-1

No Rating

-

Ord Minnett has suspended coverage of ioneer.

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09/02/2024

1

Overweight

$0.30

130.77%

Wilsons reviews the lithium market and adjusts its price deck and equity ratings after "expanding" its approach to lithium pricing. The broker holds the faith, believing recent lows are typical of a bottoming commodities cycle rather than a structural decline, and that the fundamental outlook is still very strong, and forecasts sharp long-term price rises (albeit sharply downgrading near-term prices).

The broker says its expanded approach, covering 1.3Mt LCE of potential additional supply demanding a minimum required cash flow internal rate of return of 15%, suggests that more than 50% of potential new global spodumene supply will not be developed at current spodumene prices. The read-through is that prices will need to rise to encourage supply.

Under this approach, Wilsons forecasts that long-term spodumene prices will rise 13% US$1550/t and long-term Lithium Carbonate prices will fall -20% to US$20,000/t - substantially higher than current prices of US$850/t and US$16,500/t respectively.

Under this scenario, ioneer's fullly funded potentially very low cost mine is a boon, and lengthy delays in permitting prices no longer seem so problematic and Wilsons posits ioneer could be "one of the most exciting developers in this space". 

Overweight rating. Target price falls -45% to 30c from 55c.

FORECAST
Wilsons forecasts a full year FY24 dividend of 0.00 cents and EPS of minus -3.05 cents.
Wilsons forecasts a full year FY25 dividend of 0.00 cents and EPS of minus -3.05 cents.