Insights

Top broker tips Allkem share price to jump 80%

Allkem’s shares could be heading a lot higher according to one broker…
The post Top broker tips Allkem share price to jump 80% appeared first on The Motley Fool Australia. –

The Allkem Ltd (ASX: AKE) share price has been having a tough time of late.

Due to the market volatility, this lithium producer’s shares have lost 25% of their value since this time last month.

In light of this, some investors may be wondering if the Allkem share price weakness has created a buying opportunity.

Is the Allkem share price good value now?

According to a note out of Bell Potter this morning, its analysts have reiterated their buy rating with a trimmed price target of $17.53.

Based on the current Allkem share price of $9.85, this implies potential upside of 78% for investors over the next 12 months.

Why is the broker bullish?

Bell Potter is bullish on Allkem due to its equally bullish view on lithium prices.

Unlike some analysts, the team at Bell Potter is expecting lithium prices to remain strong for the foreseeable future thanks to market deficits caused by increasing demand for the battery making material.

Combined with its growing production, the broker expects this to boost Allkem’s cash generation and profits materially in the coming years.

Bell Potter explained:

We expect AKE’s near term cash generation to lift substantially into 2023 as strength in lithium commodity indices flows through to lagged realised prices. AKE is aiming to maintain 10% share of supply in a global lithium market experiencing unprecedented growth; it has a portfolio of growth projects, balance sheet strength and cash flow from existing projects to achieve this. On our estimates, lithium demand will lift from current levels of around 500ktpa to over 1.1Mtpa in 2025 and more than 3.2Mtpa by 2030, driving market deficits and strong lithium pricing.

As for its profits, the broker is forecasting a reported net profit of US$309 million in FY 2022. After which, it expects Allkem’s net profit to lift to US$680 million in FY 2023 and US$912 million in FY 2024.

All in all, this could make Allkem a share to consider if you’re looking for lithium exposure.

The post Top broker tips Allkem share price to jump 80% appeared first on The Motley Fool Australia.

Wondering where you should 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 over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now

See The 5 Stocks
*Returns as of January 12th 2022

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

Mineral Monday: What you need to know about lithium and which ASX shares are cashing in on it
5 things to watch on the ASX 200 on Monday
The lithium and iron ore ASX shares that I like right now: expert
3 ASX All Ordinaries shares that leapt more than 10% on Thursday
Why’s the Allkem share price flaring higher today?

Motley Fool contributor James Mickleboro has positions in Allkem Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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.

  • This field is for validation purposes and should be left unchanged.

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

Share With Your Friends

Free Share Allocation Reward Levels

STARTER

Class
$ 2,500 Deposit & Trade
  • REWARD^
  • 1 x Marathon Oil Corporation (NYSE:MRO)

ECONOMY

Basic
$ 5,000 Deposit & Trade
  • REWARD^
  • 1 x Pfizer Inc (NASDAQ:PFE)

ECONOMY

Standard
$ 10,000 Deposit & Trade
  • REWARD^
  • 1 x Amazon.com Inc (NASDAQ:AMZN)

ECONOMY

Plus
$ 25,000 Deposit & Trade
  • REWARD^
  • 2 x Apple Inc (NASDAQ:AAPL)
POPULAR

BUSINESS

Class
$ 50,000 Deposit & Trade
  • REWARD^
  • 4 x Apple Inc (NASDAQ:AAPL)

FIRST

Class
$ 150,000 Deposit & Trade
  • REWARD CHOICES^
  • 12 x Apple Inc (NASDAQ:AAPL)
  • 2 x Tesla (NASDAQ:TSLA)
^Please refer to the Free Share Promotion Terms and Conditions for details.

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, 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.

FREE AAPL, TSLA, AMZN, PFE or MRO Share(s)
REGISTER TO BE ELIGIBLE FOR FREE SHARES
TRAVEL ACROSS THE FINANCIAL WORLD
Act Fast - Promotion Ends In
Click Here To Get Started
FREE AAPL, TSLA, AMZN, PFE or MRO Share(s)
REGISTER TO BE ELIGIBLE FOR FREE SHARES
TRAVEL ACROSS THE FINANCIAL WORLD
Act Fast - Promotion Ends In
Click Here For More Info