60% upside! Macquarie says buy Argosy shares now

The junior lithium miner has very exciting plans for this year, if you want to invest in its fortunes.

| More on:

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

While there are plenty of established lithium producers on the ASX, real windfalls can sometimes come from smaller miners.

That's because the smaller players can currently be in an exploratory stage, when they're searching for a viable mineral deposit. The share price can be very cheap at this phase because the business is not actually selling any lithium.

Then if they start producing at one of its sites, the stock price can rocket.

Of course, the risk is that the exploration might come to nought.

However, the analysts at Macquarie Group Ltd (ASX: MQG), for one, reckons careful selection of the best junior miners can increase your chances of success.

Happy woman miner with her thumb up signalling Wyloo's commitment to back IGO's takeover of Western Areas nickel

Image source: Getty Images

Production expected in 'coming months'

The Macquarie team is, at the moment, rather fond of lithium explorer Argosy Minerals Limited (ASX: AGY).

The Motley Fool reported a couple of weeks ago that the analysts put an outperform rating on the lithium miner with an 80 cent share price target.

That's a mouthwatering 60% upside potential from the Tuesday price of 50 cents.

"Macquarie has been pleased with the progress the company is making with its Rincon lithium project in Argentina," said The Motley Fool's James Mickleboro.

"It highlights that the steady run-rate production is expected to be achieved in the coming months."

As well as the prospect of production starting this year at the Argentinian site, the company has an exploratory project ongoing in Nevada in the US.

Great long-term prospects for lithium 

Over March and April, the Argosy share price endured a 40% fall. But according to The Motley Fool's Bronwyn Allen, there was no tangible adversity announced from the business that would cause such a plunge.

Thus the current window might present an excellent buying opportunity.

Although lithium prices have cooled off considerably over the past six months, multiple experts tip that the mineral will enjoy hot demand for years to come.

According to Shaw and Partners portfolio manager James Gerrish, lithium batteries have been around for decades, but one particular modern-day phenomenon is driving the current boom.

"It's the growth in electric vehicles that is driving the demand for this lightweight, high-energy-density input," he said on Market Matters last week.

"While we cannot see lithium prices re-scaling the 2022 highs for many years, there is still plenty of opportunity."

Motley Fool contributor Tony Yoo has positions in Macquarie Group. 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 positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Resources Shares

Buy, hold, and sell ratings written on signs on a wooden pole.
Broker Notes

Should you buy BHP shares ahead of the miner's production update?

BHP shares could see some big moves after the miner reports its March production results this week.

Read more »

A smiling businessman sits at a desk with bags of money, indicating a share price rise after funding has been approved
Resources Shares

Mineral Resources just made a $2 billion move. Here's why the stock is climbing again

Mineral Resources shares climb again as momentum builds near recent highs.

Read more »

Many cars travel on a busy six lane road way with other cars in the background travelling in the opposite direction.
Resources Shares

Atlas Arteria shares: Q1 2026 toll revenue ticks higher

Atlas Arteria delivered a steady Q1 2026, with toll revenue up 0.1% and strong results in Dulles Greenway and A79…

Read more »

Man touching a digital financial chart.
Resources Shares

Mineral Resources launches US$1.3bn notes offer to cut debt costs

Mineral Resources launches a US$1.3 billion notes offer to slash finance costs and extend debt maturity.

Read more »

Teen standing in a city street smiling and throwing sparkling gold glitter into the air.
Resources Shares

Emerald Resources hits more high-grade gold at Dingo Range and Memot

Emerald Resources delivers more high-grade gold intercepts at Dingo Range and Memot, supporting ongoing resource growth.

Read more »

Five happy miners standing next to each other representing ASX coal mining shares which some brokers say could pay big dividends this year
Resources Shares

Lynas Rare Earths shares in focus after record revenue and new supply deals

Lynas Rare Earths delivered record sales revenue, boosted rare earth production, and announced new supply deals this quarter.

Read more »

Cheerful businessman with a mining hat on the table sitting back with his arms behind his head while looking at his laptop's screen.
Resources Shares

Rio Tinto Q1 FY26: Production growth and steady guidance drive optimism

Rio Tinto delivered 9% production growth in Q1 2026 and kept its full-year guidance steady across its major divisions.

Read more »

Engineer looking at mining trucks at a mine site.
Resources Shares

Is this ASX mining stock still a buy after a recent setback?

Does a recent share price slump represent a buying opportunity?

Read more »