Insights

Macquarie (ASX:MQG) just delivered ASX lithium shares a big boost

ASX lithium shares are the soup du jour with investors and the sector just got a big upgrade from a top broker.
The post Macquarie (ASX:MQG) just delivered ASX lithium shares a big boost appeared first on The Motley Fool Australia. –

ASX share price broker upgrade ASX lithium shares buy represented by upgrade button on computer keyboard

ASX lithium shares are the soup du jour with investors and the sector just got a big upgrade from a top broker.

The analysts at Macquarie Group Ltd (ASX: MQG) upgraded their lithium price forecasts by between 30% and 100% for the next four years after they reassessed the outlook for the commodity.

Their very bullish take on the critical battery ingredient is predicated on the belief that global supply will fall short of demand.

Lithium supply shortfall looming large

“Our bullish EV [electric vehicle] demand outlook sees the lithium market move to deficit in 2022 with material shortages emerging from 2025,” said Macquarie.

“The rise in China spot prices has started to translate through to a recovery in regional lithium prices.

“Despite the strong recovery, we note that all regional prices are still down from the beginning of 2020, except for spodumene and Asia lithium carbonate prices.”

The broker believes this signals further upside to regional prices in the coming months.

ASX lithium shares upgraded to “buy”

Significantly for ASX investors, the upward revision in the lithium forecast prompted Macquarie to upgrade its recommendation on some ASX shares.

The Orocobre Limited (ASX: ORE) share price is one beneficiary as the broker upped its rating on the ASX miner to “outperform”.

Second tailwind for the Orocobre share price

Coincidentally, Orocobre issued an upgrade of its own today too. Management said that the sales price for its lithium carbonate jumped 50% to US$5,853 a tonne in the March quarter compared to the previous quarter.

“Orocobre also advises that prices for the June 2021 quarter are expected to be approximately US$7,400/tonne FOB, subject to shipping schedules,” said the miner.

“This pricing will be the highest pricing received since June 2019 and is expected to result in H2FY21 pricing being approximately 20% higher than prior guidance.”

The Orocobre share price jumped 3.5% to $5.66 in morning trade.

Other ASX lithium shares for your buy list

Another ASX miner that got upgraded to “outperform” by Macquarie is the Galaxy Resources Limited (ASX: GXY) share price.

“GXY’s earnings outlook has been transformed by the material upgrades to our lithium and spodumene pricing outlook,” added Macquarie.

“Our earnings estimates have more than doubled over the next five years, with the increased cash flow reducing debt funding requirements.”

The third lithium miner on Macquarie’s buy list is the Pilbara Minerals Ltd (ASX: PLS) share price. It too got a big earnings boost from the lithium price revision.

Macquarie’s 12-month price target on the Orocobre share price is $7.10 a share. It’s target prices for the Galaxy share price and Pilbara Minerals share price are $4.20 and $1.30, respectively.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Brendon Lau owns shares of Galaxy Resources Limited, Macquarie Group Limited, and Orocobre Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Macquarie (ASX:MQG) just delivered ASX lithium shares a big boost appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!