2 buy-rated ASX lithium shares

Lithium is a hot commodity and so are these ASX shares…
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One area of the market which has been in fine form in 2021 has been the lithium sector. This has led to a number of lithium miners and explorers generating significant returns for investors.

The good news for investors, is that brokers don’t appear to believe it is too late to invest in the sector. Here are two buy rated ASX lithium shares:

Galaxy Resources Limited (ASX: GXY)

According to a note out of Ord Minnett from last month, its analysts have a buy rating and $4.10 price target on this lithium miner’s shares. The broker has been looking at the Galaxy-Orocobre Limited (ASX: ORE) merger and sees a number of positives.

Ord Minnett notes that the merged entity will become the fifth largest lithium producer globally based on 2030 production forecasts. It will also be the largest pure-lithium producer outside China.

Its analysts commented: “While cost synergies appear limited given its high growth phase, its increased size, diversification and improving quality will give it improved power in price and offtake negotiations as a long term supplier.”

Another broker that is positive on Galaxy is Cannacord Genuity. Its analysts currently have a buy rating and $4.95 price target on its shares.

Pilbara Minerals Ltd (ASX: PLS)

A note out of the Macquarie equities desk reveals that its analysts have recently retained their outperform rating and $1.50 price target on this lithium producer’s shares.  

Macquarie believes that Australian lithium miners are well-placed to benefit from strong prices in 2021. This is due to growing demand for both lithium carbonate and lithium hydroxide in the China market. Its analysts see scope for prices to rise in the second half of the year due to increased smelter activity and the pull effect of rising prices.

As with Galaxy, Cannacord Genuity is also bullish on Pilbara. It currently has a buy rating and $1.45 price target on its shares.

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