The lithium producer’s share price has notched a new milestone.
The post The Orocobre (ASX:ORE) share price hit an all-time high today appeared first on The Motley Fool Australia. –
The Orocobre Ltd (ASX: ORE) share price hit an all-time high this afternoon. The company’s shares reached an intraday price of $7.48 before retracing back down.
At the time of writing, shares in the lithium explorer are changing hands at $7.38 apiece, jumping 3.8% into the green on the day.
Let’s take a look at what the company has been up to lately.
What’s behind Orocobre’s share price movement today?
The company’s shares jumped this morning after wealth management firm Ord Minnett provided a broker update.
The firm reports it now has a price target of $8.45 on Orocobre shares and has upgraded to a buy recommendation.
Ord understands that Orocobre will derive immense benefit from high lithium spot prices.
It also believes it will benefit greatly from its proposed merger with Galaxy Resources Limited (ASX: GXY). The firm’s price target implies a 15% upside potential at the time of writing.
In addition to Ord Minnett’s report, investment banking giant JP Morgan also raised its price target on the company by 14% to $8.45 today.
JP Morgan cited similar reasons to Ord Minnett for its price target hike.
Lithium demand outpacing supply
Macquarie views the market as heading towards a “perpetual deficit” with “supply unable to keep up with rampant demand”.
This is underscored by the high demand for lithium-ion batteries, which are used in electric vehicles for instance.
In its report, Macquarie stated:
Lithium prices are expected to continue to rise, moving to an incentive price by CY24. Some new supply additions temporarily tighten the market in CY26, but beyond CY27 the supply deficit widens significantly.
Both JP Morgan and Ord Minnett firmly believe that Orocobre is well-positioned to capitalise on this surge in demand.
Orocobre share price snapshot
The Orocobre share price has posted a return of 66% this year to date, extending the last 12 months’ return of 181%.
These gains have outpaced the S&P/ASX 200 Index (ASX: XJO)’s return of ~11.6% over the same time frame.
At the time of writing, Orocobre has a market capitalisation of around $2.5 billion.
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 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 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.
*Returns as of May 24th 2021
Is the Appen (ASX:APX) share price an opportunity?
Why the Novonix (ASX:NVX) share price rocketed 16% today
ASX lithium shares are surging on Tuesday. Here’s why
The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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.