Up 24% in 2023, is it too late to buy Allkem shares?

The ASX lithium share has been trending higher in the year to date.

| More on:
A man in his 30s with a clipped beard sits at his laptop on a desk with one finger to the side of his face and his chin resting on his thumb as he looks concerned while staring at his computer screen.

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

Allkem Ltd (ASX: AKE) shares are down 2.9% to $1370 in early afternoon trading on Thursday.

But over the course of 2023, the ASX lithium share has been gradually rising and is up 24% overall.

Is it too late to buy?

Are Allkem shares a buy at today's price level?

Well, top broker Goldman Sachs thinks so.

The broker retained its buy rating on Allkem shares after the company reported its FY23 results.

The miner revealed a group net profit after tax (NPAT) of US$525 million, up 57% on FY22.

Goldman thinks the Allkem share price will grow from here.

It's placed a 12-month price target of $17.20 on Allkem shares.

HSBC also has a buy rating on Allkem shares with a share price target of $17.30.

This implies a potential upside of 26% for ASX investors who buy the miner today.

Bell Potter is more bullish with its buy rating plus a $19 share price target.

That implies a potential 39% upside.

Citi has a similar price target of $18.50 on Allkem shares.

What's going to happen with lithium prices?

As my Fool colleague James reports, Goldman predicts a pretty steep fall in all types of lithium commodity prices from here over the next few years.

This is important because commodity prices directly affect the share prices of companies like Allkem.

For example, Goldman is tipping that the lithium carbonate price will fall from about US$25,000 per tonne today to US$15,331 in 2024, US$11,000 in 2025, and US$16,883 in 2026.

According to an analysis published on Trading Economics, there are "compounding signs of low demand".

The analysis explains:

Battery manufacturers for new energy vehicles phased out buying activity since the start of the third quarter as their input inventories filled up and funds from previous government-led subsidies dried.

The concerning macroeconomic backdrop for the Chinese economy also translated to low consumer spending for electric automobiles …

Despite a 32% year-on-year growth in new energy vehicle sales during the period, reports showed that over 10 Chinese new-energy vehicle producers offered new rounds of price cuts to meet second-half sales targets.

The lithium carbonate spot price has fallen by more than 60% since the beginning of the year.

Strong lithium prices contributed to Allkem's FY23 profit boost. The company reported an average realised price for lithium carbonate of US$43,981 per tonne in FY23 — almost double that of FY22.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 30 April 2025

Citigroup is an advertising partner of The Ascent, a Motley Fool company. HSBC Holdings is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended HSBC Holdings. 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 Materials Shares

A man checks his phone next to an electric vehicle charging station with his electric vehicle parked in the charging bay.
Materials Shares

Are Pilbara Minerals shares too cheap to ignore?

A leading broker has given its verdict on this beaten down lithium miner.

Read more »

An unhappy man in a suit sits at his desk with his arms crossed staring at his laptop screen as the PointsBet share price falls
Materials Shares

Does Macquarie rate James Hardie shares a buy, hold or sell?

The company is set to report FY25 earnings this week.

Read more »

Man with rocket wings which have flames coming out of them.
Materials Shares

Why is the Core Lithium share price jumping 19% today?

Something is getting investors excited. Let's find out what it is.

Read more »

A woman holds up hands to compare two things with question marks above her hands.
Financial Shares

Which is better value right now, Soul Patts or Brickworks shares?

Let's dive in and see what the experts have to say.

Read more »

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

Core Lithium shares charge higher on big news

This lithium miner is starting the week strongly. But why?

Read more »

Lion roaring in the wild, symbolising a rising Liontown share price.
Materials Shares

Why did the Liontown share price rip 19% higher today?

This ASX lithium share was the fastest riser of the ASX 200 today.

Read more »

A female miner wearing a high vis vest and hard hard smiles and holds a clipboard while inspecting a mine site with a colleague.
Materials Shares

Why are Fortescue shares charging higher today?

What is getting investors excited today? Let's find out.

Read more »

Business people discussing project on digital tablet.
Materials Shares

What does Macquarie think Liontown Resources shares are worth?

Let's see if analysts think that this lithium miner is in the buy zone or best avoided.

Read more »