Company Overview: ioneer Ltd (ASX: INR) is an Australian company involved in the lithium-boron supply and has a significant project as Rhyolite Ridge in Nevada, United States. It was listed on ASX on 19 December 2007 and holds a market capitalization of ~$1.16 billion as of 24 March 2022.

­­­­­­INR Details

Q3FY22 Performance

H1FY22 Cash Flow Snapshot

Top 10 Shareholders:

The top 10 shareholders together form ~35.34% of the total shareholding. Centaurus Capital LP and Sibanye Gold, Ltd. hold a maximum stake in the company at ~­­­8.88% and ~6.98%, respectively.

Key Metrics:

Equity placements improved cash flow from financing activities leading to an improved cash position at $144.24 million as of 31 March 2022. With decent liquidity in place, INR can sustain proper capital expenditure and exploration activities.

Outlook:

Key Risks:

INR is exposed to the risks of supply chain constraints and labour shortages. Moreover, INR has generated no revenues, raising concern over shareholder returns.

Stock Recommendation:

The stock of INR has provided a return of ~-21.17% and ~-18.80% in the past six months and one month period, respectively. The stock is currently trading slightly below the average 52-weeks band of $0.270 and $0.855. Considering the binding sale contracts, favourable financial position, bullish signals in the battery industry, current trading levels, technical levels mentioned below, and key risks associated with the business, we give a “Speculative Buy” recommendation at the closing market price of $0.540, down by ~2.702%, as of 24 May 2022.

Technical Commentary

INR stock price broke the downward sloping trend line by upside, and the prices are sustaining above the breakout level for the past week. A bullish harami candlestick pattern is also visible on a weekly chart that supports our bullish stance. RSI (14-period) also stood up from the oversold region at ~45 levels, indicating that the stock is getting upside momentum. Immediate support levels are AUD 0.473 and AUD 0.415, while key resistance levels are AUD 0.695 and AUD 0.800.

INR Daily Technical Chart (Source: REFINITIV)

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: The reference data in this report has been partly sourced from REFINITIV

Note 2: Investment decisions should be made depending on the investors’ appetite for upside potential, risks, holding duration, and previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

Technical Indicators Defined: -

Support: A level where-in stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.