European Lithium’s Strategic Pivot Ignites Major Analyst Optimism

A dramatic price target revision and a significant single-day surge have returned European Lithium to the spotlight of market attention. Analysts at First Berlin Equity Research have fundamentally reassessed the company's valuation, now projecting substantial upside potential for its shares. The core driver of this renewed optimism, however, marks a notable strategic shift away from the company's previously flagship asset.

In a decisive move, First Berlin analyst Simon Scholes substantially increased the firm's price target on European Lithium shares from €0.14 to €0.22, representing a 57 percent uplift, while reiterating a "Buy" recommendation. This reassessment is underpinned by a critical methodological change: the company's value is now primarily derived from its indirect stake in the Tanbreez rare earths project in Greenland, rather than its core lithium venture. European Lithium holds a 45 percent interest in Nasdaq-listed Critical Metals Corp (CRML), the entity developing the Tanbreez project.

Consequently, the Austrian Wolfsberg lithium project, once the central investment thesis, plays a diminished role in the analysts' medium-term valuation model. Fundamental support for the new target stems from a robust financial position. The combined cash reserves of European Lithium and Critical Metals Corp exceed $205 million, which fully covers the $150 million in initial capital expenditures estimated for Tanbreez in the preliminary economic assessment (PEA).

Operational Advances Strengthen the Investment Case

Recent developments at Critical Metals Corp further bolster the narrative. Just two weeks ago, CRML entered into a joint venture with Romanian state-owned enterprise Fabrica de Prelucrare a Concentratelor de Uraniu S.R.L. (FPCU). This partnership secures an offtake agreement for 50 percent of the Tanbreez concentrate, raising the total contracted production to 75 percent.

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

This move carries geopolitical significance, establishing a rare earths supply chain within NATO partner nations and reducing dependency on Chinese processing. The venture is further supported by a non-binding letter of intent from the US EXIM Bank for a financing package worth $120 million, alongside the acquisition of a pilot plant on December 12.

Market Tailwinds and Regulatory Crosscurrents

While analysts pivot focus to Greenland, the core lithium business is experiencing favorable market conditions. Lithium carbonate prices recently hit an 18-month high of nearly 110,000 yuan per tonne, triggered by the revocation of mining licenses in China. In response, JPMorgan raised its 2026 price forecast to $17,500 per tonne.

Nevertheless, regulatory challenges persist in Austria. A November 25 ruling by the Federal Administrative Court overturned a prior exemption for the Wolfsberg project's environmental impact assessment (EIA). The new requirement mandates case-by-case reviews instead of relying on blanket thresholds. While management expresses confidence that existing documentation will suffice, investors should anticipate potential delays in the permitting timeline.

The next key milestone for shareholders is the publication of half-year figures in March 2026. Market attention until then will remain fixed on the completion of the Tanbreez feasibility study, also anticipated by the end of the first quarter of 2026.