ASX-listed companies IGO Limited (AU:IGO), Pilbara Minerals (AU:PLS), and Allkem Limited (AU:AKE) are well-known companies in the lithium sector.
Recently, the Australian lithium industry experienced a general decline, following the negative performance of its counterparts on Wall Street. Also, falling lithium prices have slowed down the bull run of these players. However, analysts feel there are some catalysts that could further pull up lithium demand and share prices.
Three days ago, Goldman Sachs reiterated its ratings on these three lithium stocks on the ASX market. The investment bank considers them well suited for the sector, considering their production capabilities.
Let’s take a look at the details.
Is Allkem Ltd. a Good Investment?
Allkem is a dedicated chemical manufacturing company specializing in the production of a wide range of lithium chemicals, including lithium carbonate, lithium hydroxide, and spodumene concentrates.
Nicolaci also confirmed his Buy rating on AKE stock at a price target of AU$17.20, which implies a 10% upside potential. He believes Allkem exhibits the most promising growth outlook in terms of lithium carbonate equivalent (LCE) production, which is projected to increase by more than four times by FY2028. Furthermore, the company possesses additional downstream potential for carbonate production.
The stock has gained over 50% in the last year. The average price forecast is AU$15.84, which is 1.55% above the current trading level. The stock has a Strong Buy rating on TipRanks with 10 Buy and three Hold recommendations.
IGO Share Price Forecast
IGO is a mining company primarily focused on the exploration of various valuable resources important for clean energy.
Goldman likes the prospects of IGO, considering its low-cost production of minerals and higher vertical integration. Nicolaci predicts a growth rate of 9% in its share price while maintaining his Buy rating on the stock.
Overall, IGO stock has a Moderate Buy rating on TipRanks with six Buy, three Buy, and one Sell recommendations. The average price of AU$15.28 offers a growth of 3.6% in the share price.
Is Pilbara Minerals a Good Investment?
Pilbara is a leading mining company engaged in lithium and tantalite. Analysts hold a positive outlook on Pilbara, driven by the company’s solid expansion, downstream activities, and the potential to sustain impressive profitability. The company is also equipped with a strong project pipeline and a proven track record of successful production, making it well-positioned to meet the increasing demand for lithium.
Three days ago, Goldman Sachs analyst Hugo Nicolaci reiterated his Hold rating on the stock with a prediction of 7% growth in the share price.
PLS stock has a Moderate Buy rating on TipRanks based on a total of eight recommendations, including five Buy, two Hold, and one Sell. The average target price of AU$4.98 represents a growth of 6.8% on the current trading price.
Ending Notes
Following a strong performance over the past three years, growth in the lithium sector has decelerated due to declining prices. According to analysts, the projected increase in demand for lithium from China is anticipated to once again drive up lithium prices.
Goldman holds a bullish outlook on AKE and IGO, whereas it has assigned a Hold rating to PLS.
