Analyst Confidence Soars for European Lithium with Revised Price Target

A prominent research firm has significantly boosted its outlook for European Lithium, providing substantial validation for the company's strategic direction. The revised assessment places greater emphasis on its Greenland-based rare earths venture while the company actively supports its share price through a buyback initiative, all against a backdrop of strengthening lithium markets.

First Berlin Equity Research updated its investment thesis on December 19, raising its 12-month price target for European Lithium from €0.14 to €0.22—a substantial 57% increase. The firm reaffirmed its "Buy" recommendation for the stock.

This reassessment follows a period of remarkable share price performance. Trading on the ASX at AUD 0.17, the stock has climbed 6.25% over the last five sessions. Since the start of the year, gains range between 280% and 305%, positioning it as one of the standout performers within Australia's mining sector.

The core reason for the upgraded valuation is a strategic reweighting within the company's project portfolio. First Berlin's updated model now assigns more value to the Tanbreez rare earths project in Greenland, while the Austrian Wolfsberg lithium asset assumes a relatively secondary role in the analysis.

Portfolio Strengths and Financial Position

European Lithium maintains an approximate 45% stake in NASDAQ-listed Critical Metals Corp (CRML), which holds controlling interests in both the Tanbreez and Wolfsberg projects. Analysts highlighted several key financial and technical strengths:

• The combined cash reserves of European Lithium and Critical Metals Corp exceed $205 million USD.
• This current liquidity surpasses the $150 million USD in initial capital expenditures outlined in the Tanbreez preliminary economic assessment.
• The technical feasibility of the Tanbreez project received confirmation back in 2019 through the European Union's EURARE project.

These factors collectively underpin the analyst's more optimistic valuation of the company's asset base.

Share Buyback Program Provides Market Support

Concurrently, the company is executing a substantial capital management strategy. As of December 19, its ongoing share repurchase program had acquired a total of 22,610,119 shares from the market. Notably, 1,345,121 of these shares were purchased on the single trading day prior to the announcement.

Announced in October 2025, the program authorizes the buyback of up to 135 million shares, equivalent to roughly 10% of the company's issued capital. This volume acts as a stabilizing force for the share price, particularly during the volatile December trading period.

Operational Momentum and Strategic Partnerships

Recent corporate updates from both European Lithium and Critical Metals Corp have reinforced the investment narrative:

• December 16: The company closed an options offer with an acceptance rate of approximately 83%.
• December 12: Critical Metals Corp reported the acquisition of a proof-of-concept pilot plant for AUD 3 million.
• December 9: A term sheet was signed for a 50/50 joint venture with Romanian state-owned enterprise Nuclearelectrica, focused on downstream processing of rare earths.

The partnership with Nuclearelectrica is designed to develop shared downstream capacity, thereby strengthening Tanbreez's position within the value chain.

Should investors sell immediately? Or is it worth buying European Lithium?

Lithium Market Tailwinds

Broader market conditions are also providing support, particularly for the Wolfsberg lithium project. Lithium carbonate futures on the Guangzhou exchange recently climbed to about CNY 99,500 per tonne, reaching an 18-month high.

This surge was triggered by regulatory action in China's Jiangxi province, where authorities revoked 27 mining licenses. In response, JPMorgan raised its lithium price forecast for 2026 to $17,500 USD per tonne. A sustained higher price environment would significantly improve the long-term economics of the Wolfsberg project.

Regulatory Hurdles in Austria

Despite favorable markets, Wolfsberg faces ongoing regulatory challenges. In late November 2025, Austria's Federal Administrative Court overturned a previously granted environmental exemption. Future approvals will now require individual case assessments, moving away from a blanket reliance on a 10-hectare threshold rule.

Critical Metals Corp has expressed confidence that its existing environmental documentation will meet the requirements of the new review framework, though some delays to the project timeline are acknowledged as possible.

Backing from European Critical Raw Materials Policy

The strategic importance of European Lithium's projects is amplified by political initiatives at the EU level. On December 3, the European Commission adopted the RESourceEU action plan, establishing a funding framework of up to €3 billion for critical raw material projects.

An early signal of this support came from the European Investment Bank, which approved €250 million in financing for Vulcan Energy's German lithium project. This underscores the growing interest from institutional investors in European battery material supply chains.

For Critical Metals Corp, the Romanian joint venture structure is particularly significant. It anchors the Tanbreez project within Western-aligned supply chains, aiming to create an integrated "mine-to-magnet" value stream that bypasses Chinese processing steps.

Market Performance and Future Catalysts

Throughout December, European Lithium shares traded in a range between AUD 0.145 and AUD 0.235. Sustained high trading interest is evidenced by an average daily volume exceeding 21 million shares.

Looking ahead, three primary factors are poised to influence the share price trajectory:

1. Commodity Prices: The continuation of elevated or further rising lithium prices, ideally at or above CNY 110,000 per tonne.
2. Partnership Execution: Tangible progress in implementing the Romanian cooperation agreement for Critical Metals Corp.
3. Regulatory Clarity: Definitive outcomes from the environmental review process for the Wolfsberg project in Austria.

The next financial report is anticipated in the second quarter of 2026, likely around March 12. Until then, the market will be closely monitoring measurable advances at Tanbreez, execution of the downstream strategy, and signals regarding regulatory resolution for Wolfsberg.