The Allkem Ltd (ASX: AKE) share price is inching lower today, trading at $13.05 at the time of writing.
Zooming out, Allkem shares have lunged 29% higher in the last month and 135% in the last 12 months.
Swimming in a sea of green, the company has just scored itself a number of broker upgrades. Particularly given its ambition to become one of the world's biggest lithium suppliers.
Why are analysts bullish on Allkem shares?
Analysts have put themselves behind Allkem in sequential fashion these past few months. In that time the company has released a number of lithium updates.
"Allkem has the lofty goal of becoming the world's third biggest supplier of lithium chemicals and snaring 10 per cent of the market by 2030," The Australian reports.
Not only that, but Allkem's seemingly diversified offering positions it well to capitalise on emerging trends in the energy space, JP Morgan analysts say.
"Allkem (formerly Orocobre) holds a suite of both operating and development lithium projects and is well placed to capitalise on the growing electrification thematic," it said in a recent note.
It operates across all three key lithium chemicals, with the Olaroz lithium brine JV in Argentina, the Mt Cattlin spodumene mine in Western Australia, and has the Naraha hydroxide conversion facility in Japan ramping up.
The growth pipeline is full, with Stage 2 at Olaroz more than doubling production and potential for Stage 3, while the greenfield Sal de Vida brine project in Argentina and James Bay Spodumene project in Canada offer additional medium-term growth.
The broker retains its overweight rating on the Allkem share price. JP Morgan has an $18.50 per share valuation on a blend of these catalysts for price change.
"With the backdrop of continuing lithium demand and pricing strength and AKE's substantial growth pipeline, we remain overweight," it concluded.
'Ready to roar'
Meanwhile, analysts at Bell Potter believe the company's growth engine is well fuelled and primed to roar in 2022. They are keeping it on the bullish side as well.
Assigning a buy call and an $18.05 price target on Allkem shares, Bell Potter said, "[t]he company's growth pipeline supports this strategy [the goal outlined above] and is fully funded, even using a price outlook which is conservative compared to spot markets."
With this commentary in mind, it appears brokers like Allkem's balance sheet and fundamentals. Of course, that's on a backdrop of an extensive spot rally in commodities.
The consensus price target on Allkem shares is $14.87, according to Bloomberg data. Further, 81.8% of analysts recommend buying right now. That's up from 30% exactly one year ago.
