The Allkem Ltd (ASX: AKE) share price is having a strong day on Tuesday.
In afternoon trade, the lithium miner's shares are up 3.5% to $10.57.
This means the Allkem share price is now up 35% since this time last year.
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Can the Allkem share price keep rising?
The good news for investors is that one leading broker still sees plenty of upside in the Allkem share price.
According to a recent note out of Morgans, its analysts have retained their add rating and lifted their price target on the lithium miner's shares to $16.72.
Based on the current Allkem share price, this implies potential upside of 58% for investors over the next 12 months.
What did the broker say?
Morgans was pleased with Allkem's fourth quarter update, which revealed record free cash flow generation thanks to increased production and strong lithium prices.
The broker believes that this bodes well for FY 2023, particularly given the expectation for increased production as Naraha and Stage 2 Olaroz come online.
It commented:
AKE holds long lived brine assets that are well leveraged to the lithium carbonate price and Mt Cattlin looks to be highly profitable for its remaining life with high exposure to the spot market. Additionally the Naraha plant will give the company exposure to lithium hydroxide prices in addition to spodumene and carbonate.
We believe that the strong cash flows we're anticipating in FY23 will make the value proposition more compelling than the uncertainties of the lithium market. We maintain our ADD rating with potential 12-month upside of 69% [now 58] but we note that the lithium market is still developing and comes with higher risks.
