The Orocobre Limited (ASX: ORE) share price has continued its ascent on Monday and is higher by over 2.5% to $5.95 in early afternoon trade.
This means the lithium miner's shares have now climbed a remarkable 76% in just the last three months.
Can Orocobre's shares climb higher?
Although I feel that the shares of Orocobre are about fair value now, one leading broker disagrees and thinks they can still climb meaningfully higher from here.
According to a note out of UBS this morning, the broker has retained its buy rating and increased its price target on the lithium miner's shares to $7.00. This price target implies potential upside of approximately 18% from the current share price.
Last week Orocobre reaffirmed its full-year production guidance of 14,000 tonnes of lithium carbonate at its Olaroz site in Northern Argentina.
The broker, however, believes that management is being conservative and that there is the potential for stronger production this year.
Furthermore, the investment bank expects the lithium market to remain tight until at least 2020 due to rising demand for lithium carbonate from electric vehicle and renewable energy manufacturers.
This should ensure that lithium miners such as Orocobre, Galaxy Resources Limited (ASX: GXY), and Pilbara Minerals Ltd (ASX: PLS) continue to profit from sky high prices for the metal for some time to come.
Should you invest?
While I think that the lithium miners are all about fair value now and ought to be classed as holds, the price target set by UBS certainly provides a compelling risk/reward.
This could arguably make it a good investment option for investors with a high tolerance for risk and limited exposure to the lithium market.
