Lithium Royalty Corp., the Basic Materials sector company, was revisited by a Wall Street analyst today. Analyst David Deckelbaum from TD Cowen maintained a Buy rating on the stock and has a C$7.00 price target.
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David Deckelbaum has given his Buy rating due to a combination of factors that highlight the potential for future growth and profitability of Lithium Royalty Corp. Despite the recent dip in revenue to C$127k in the second quarter, largely due to low lithium prices and shipment timing, the outlook is promising with new royalty revenues expected from projects like Mariana and Tres Quebradas starting in the second half of 2025 and early 2026, respectively. Additionally, lithium prices have seen a significant increase of 52% since late June, which bodes well for future earnings.
Another factor contributing to the Buy rating is the company’s strategic financial maneuvers, such as the repurchase of C$4 million in shares, effectively reducing the free float by 9%. This move, alongside the sale of a $28 million stake in Tres Quebradas, has bolstered the company’s cash reserves to $28 million, with no outstanding debt. Furthermore, the company’s diverse portfolio, including royalties from projects like Finniss, which promises substantial future revenue, adds to the positive outlook. These elements combined suggest a robust potential for growth, justifying the Buy recommendation.
Deckelbaum covers the Energy sector, focusing on stocks such as California Resources Corp, Sable Offshore, and Coterra Energy. According to TipRanks, Deckelbaum has an average return of 5.9% and a 41.59% success rate on recommended stocks.