Top broker tips Orocobre (ASX:ORE) share price to rise 21%

The Orocobre Limited (ASX: ORE) share price has been on fire in 2021. Since the start of the year, the …

| More on:
asx share price increase represented by golden dollar sign rocketing out from white domes of lithium

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Orocobre Limited (ASX: ORE) share price has been on fire in 2021.

Since the start of the year, the lithium miner's shares have risen a sizeable 91%.

This is a whopping 10 times greater than the 9% return generated by the S&P/ASX 200 Index (ASX: XJO) over the same period.

Why is the Orocobre share price smashing the market?

Investors have been bidding the Orocobre share price higher this year thanks to bullish sentiment in the lithium sector. This is being underpinned by rising prices and the very favourable outlook for the battery making ingredient due to electric vehicle and renewable energy adoption.

In addition to this, Orocobre recently completed its merger with Galaxy Resources. This has created a top five lithium mining company, soon to be rebranded as Allkem, with strong operations and equally strong growth prospects.

Is it too late to invest?

The good news is that one leading broker still sees plenty of upside for the Orocobre share price.

According to a note out of Citi this week, its analysts have retained their buy rating and lifted their price target on the company's shares to $10.50.

Based on the current Orocobre share price of $8.66, this implies potential upside of 21% over the next 12 months.

What did the broker say?

Citi is a fan of the Orocobre-Galaxy merger. It believes the merged company is well-placed to benefit from strong lithium prices.

The broker commented: "The ORE-Galaxy Resources Ltd (GXY) merger has formed one of the largest ASX-listed lithium pure-play companies and among the top five global lithium producers; we forecast pro-forma FY22 lithium carbonate equivalent sales of around 37kt. The company is diversified geographically and by production method, with hard rock and brine assets."

"ORE's joint venture with Toyota Tsusho Corporation (TTC, now a 6.2% ORE shareholder) has supported the development of its flagship asset (Olaroz, Argentina) and the company's first investment in downstream battery grade lithium hydroxide production (Naraha, Japan). ORE is in a strong position to benefit from strong lithium demand as a result of the global decarbonisation movement," it concluded.

Motley Fool contributor James Mickleboro owns shares of Orocobre 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 Bruce Jackson.

More on Broker Notes

Person pointing finger on on an increasing graph which represents a rising share price.
Broker Notes

These ASX shares could rise 20% to 30%

Big returns could be on the cards for buyers of these shares according to analysts.

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Broker Notes

All about the momentum: Which ASX 200 stocks does Macquarie currently favour?

These stocks have strong positive momentum.

Read more »

Woman checking out new iPads.
Broker Notes

'Lock in profits at these levels': Expert's verdict on 2 ASX 200 shares

Tony Locantro of Alto Capital says it might be time to take profits on these high-flying ASX 200 shares.

Read more »

Woman on the phone at a hardware store.
Broker Notes

Up 21% this year, how much further upside does Macquarie tip for Metcash shares?

Metcash shares tick many boxes for investors.

Read more »

A man slumps crankily over his morning coffee as it pours with rain outside.
Broker Notes

Guess which popular ASX 200 stock Bell Potter just downgraded

Let's see what the broker is saying on this blue chip.

Read more »

A male sharemarket analyst sits at his desk looking intently at his laptop with two other monitors next to him showing stock price movements
Broker Notes

Leading brokers name 3 ASX shares to buy today

Here's why brokers believe that now could be the time to snap up these shares.

Read more »

Miner standing in a mine site with his arms crossed.
Broker Notes

Up 41% in 2025, does Macquarie think Lynas Rare Earths shares have peaked?

The company is up nearly 400% in 5 years.

Read more »

Three miners looking at a tablet.
Broker Notes

Macquarie tips 28% upside for this ASX All Ords mining stock

Let's see why the broker is bullish on this beaten down miner.

Read more »