Brokers name 3 ASX 200 lithium shares primed to take off

The lithium story continues to play out in 2022.

| 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

Key points

  • ASX 200 lithium shares continue driving north in 2022 as lithium prices remain top-heavy
  • Brokers are turning more constructive on the space with analysts upgrading targets and ratings on three leading players
  • Each of these ASX 200 lithium shares has pushed well into the green over the past 12 months

Lithium carbonate prices have levelled off in recent weeks and now trade at 475,500 yuan/tonne at last check.

Despite a small reversal period, prices for the white salt – which is widely used to make cathode material for lithium-ion batteries when in 'battery grade' form – are holding multi-year highs on Wednesday.

New bulls arrive for ASX 200 lithium shares

Analysts at Barrenjoey Markets are heavily bullish on three leading ASX 200 lithium shares.

The broker has initiated coverage with buy calls on each of IGO Ltd (ASX: IGO), Allkem Ltd (ASX: AKE) and Liontown Resources Ltd (ASX: LTR).

It values IGO at $14.50 per share and starts Allkem at $15 while assigning a $1.80 price target for Liontown.

For each of these players, this represents a double-digit upside potential should Barrenjoey's forecasts come to fruition.

Allkem also received an upgrade from Cowen with an $18 per share valuation, whereas analysts at UBS completely reversed course from a sell to a buy rating on IGO.

In a recent note, the Swiss investment bank was constructive on a number of catalysts, including IGO's first production of battery-grade lithium hydroxide at Kwinana, the Western Areas transaction and a recent pullback in the share price.

Not only that, but IGO's exposure to the Greenbushes mine remains a key driver for the miner's share price, UBS says.

"As the downstream ramps up Greenbushes remains the earnings driver into," it said, adding that the joint venture with Tianqi is substantially de-risked with the Kwinana update.

UBS values IGO at $12.15 per share.

Foolish summary

Each of these ASX 200 lithium shares has pushed well into the green over the past 12 months. Liontown is up 240% in a year whereas Allkem has surged 120% and IGO 62%.

Motley Fool contributor Zach Bristow has no position 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 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 Scott Phillips.

More on Broker Notes

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Broker Notes

These ASX 200 shares could rise 50% to 60%

Brokers believe these shares could deliver big returns for investors.

Read more »

Broker written in white with a man drawing a yellow underline.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

Woman with a scared look has hands on her face.
Broker Notes

Bapcor shares fell more than 30% yesterday. Should investors buy in the dip?

Is this a value opportunity?

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Broker Notes

Broker raises price targets on 2 ASX 200 shares to buy

Ord Minnett has just upped its 12-month share price targets on 2 buy-rated ASX 200 stocks.

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Broker Notes

Morgans says these ASX can rise 30% to 50%

The broker has good things to say about these shares.

Read more »

Two businessmen look out at the city from the top of a tall building.
Broker Notes

2 ASX REITs to buy in July: expert

Is it time to consider ASX REITs?

Read more »

Delighted adult man, working on a company slogan, on his laptop.
Broker Notes

Broker tips 20% upside for these ASX utilities shares

Bell Potter sees upside in these two shares.

Read more »

A beautiful woman with brown hair and wearing bright red lipstick looks shocked as she holds her hand to her cheek in response to the crumbling Adore Beauty share price today
Broker Notes

3 ASX consumer sector shares to avoid in July: expert

If you're looking to buy ASX consumer shares in July, read on.

Read more »