Like most every S&P/ASX 200 Index (ASX: XJO) lithium share, IGO Ltd (ASX: IGO) has been struggling amid ongoing weakness in global lithium markets.

With revenue and profits slumping, the IGO share price has tumbled from $7.06 a year ago to $4.50 a share in afternoon trade today. This puts IGO shares down a painful 36.3% over the past 12 months.

Following that kind of fall, you may be tempted to do some bargain buying in the embattled ASX 200 lithium share.

But according to Bell Potter Securities' Christopher Watt, that could prove to be a costly mistake (courtesy of The Bull).

Here's why.

ASX 200 lithium share risks more downside

"IGO faces headwinds in response to a downgraded lithium price outlook, which may weigh on profitability," said Watt, who has a sell rating on the ASX 200 lithium share.

He noted that, "The shares have fallen from $7.94 on February 29, 2024, to trade at $4.82 on February 13, 2025."

Watt added:

IGO reported a group EBITDA [earnings before interest, taxes, depreciation and amortisation] loss of $79 million in the second quarter of fiscal year 2025. The company's share in the TLEA joint venture resulted in a loss of $57 million. Sales revenue of $132 million was down 8% on the prior quarter.

And Watt maintains a fairly bearish short-term outlook on IGO shares.

"With limited near-term catalysts for a recovery amid the risk of further downside, investors should consider exiting their positions," he said.

What's the latest from IGO?

IGO reported its half-year results (H1 FY 2025) yesterday, 20 February, about a week after Watt revealed his sell recommendation on the ASX 200 lithium share.

IGO shares have dropped 3.0% since Thursday's results release, coming under renewed pressure after the miner reported a 35% year on year fall in revenue to $284 million.

And the company reported a hefty net loss after tax of $782.1 million for the six months to 31 December. For some context, IGO reported a profit after tax of $288.3 million in H1 FY 2024.

And, as Watt mentioned up top, much of the profit loss was driven by IGO's share in the Tianqi Lithium Energy Australia (TLEA) joint venture. IGO reported a $602 million loss from its stake in the JV for the half year.

In light of this performance, management opted not to pay an interim dividend. Last year, the ASX 200 lithium share paid a fully franked interim dividend of 11 cents per share.