Spodumene prices have come under pressure in recent weeks, and we have cut our near-term price outlook for the commodity, downgrading our price forecasts by 15-20% through to the end of 2025. The weaker outlook has driven cuts of 21% and 10% to group earnings for FY25 and FY26. The weaker spodumene price outlook has significantly increased the importance of Nova to IGO’s earnings. We estimate Nova will account for ~60% of asset Ebitda in FY25 and 40% in FY26. Greenbushes is a world class asset, accounting for ~80% of our valuation for IGO. However, the near-term cuts to our earnings forecasts and the weaker spot price has driven an 8% cut to our price target to A$8.00.
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