Citi analysts have reduced their price target on Australia’s Core Lithium (ASX:CXO) to A$0.40 per share, down from A$0.40 per share, maintaining a ‘sell’ rating.

The company announced plans on Wednesday to raise around A$100 million to A$120 million in funds, representing a 27% discount.

This timing of the equity raising surprised Citi, which also questioned the convictions pertaining to the performance of Core Lithium’s Finniss lithium project.

The downgrade in price target arrived after Citi updated their model valuation estimates, having noticed that Core Lithium was encountering more ramp-up challenges compared to other lithium producers.

They have projected an EPS dilution in FY24 of 12% and 13% in FY25.

As of the most recent closing, the stock had fallen 46.8% this year.

Core Lithium (ASX:CXO) is an Australia-based company specializing in lithium production projects.