Recent spot sales from existing producers point to an improving near-term price outlook. Spot prices remain depressed, however, with recent sales over US$800/t, we see a pathway for a recovery in prices over the remainder of 2024. Rising Chinese owned supply has weighed on sentiment in the lithium sector, and we have reduced our medium-term price peak assumptions to reflect higher supply levels than we previously anticipated. These changes translate to material cuts to our medium-term earnings outlook for IGO, with our forecasts falling 12-25% for FY25-FY29. However, incorporating an expected improvement in spot prices more than offsets the cuts to earnings and we lift our price target 3% to A$6.80 and reiterate our BUY rating on IGO.
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