Own Allkem shares? Here's what to expect from its FY23 results

Is this lithium giant going to deliver the goods in FY 2023?

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Do you own Allkem Ltd (ASX: AKE) shares? If you do, you will no doubt be crossing your fingers that the lithium miner delivers a strong result this month.

But what would be strong? Let's take a look to see what the market is expecting from Allkem when it reports its results on 18 August.

Allkem FY 2023 results preview

According to a note out of Goldman Sachs, its analysts are expecting Allkem to deliver revenue of US$1,211 million. This represents a 57.3% increase on FY 2022's revenue of US$770 million.

And with the broker forecasting a 4 basis point increase in its underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) margin to 73%, this will underpin even stronger earnings growth.

Goldman has pencilled in underlying EBITDA growth of 67.2% to US$888 million.

And on the very bottom line, the broker is expecting underlying earnings to come in at US$436 million or 68.3 cents per share.

Will there be a dividend?

Although Goldman is expecting Allkem to report free cash flow of US$228 million, it isn't expecting this to lead to any dividends being paid, unfortunately.

In fact, as things stand, the broker doesn't believe a dividend will be paid until FY 2027. Though, its proposed merger with Livent Corp (NYSE: LTHM) will have been completed long before then if all goes to plan.

Are Allkem shares a buy?

Goldman continues to see a lot of value in Allkem shares at the current level.

Its analysts have a buy rating and a $17.10 price target, which implies a potential upside of greater than 17% for investors over the next 12 months.

Stay tuned for its result next week.

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Motley Fool contributor James Mickleboro has positions in Allkem. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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.

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