Top broker gives its verdict on the Orocobre (ASX:ORE) share price

Is it too late to buy this lithium miner’s shares?

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asx share price increase represented by golden dollar sign rocketing out from white domes of lithium

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It certainly has been a fantastic year for the Orocobre Limited (ASX: ORE) share price.

So far in 2021, the lithium miner’s shares are up an impressive 105%. This compares to an 11% gain by the ASX 200.

Can the Orocobre share price keep rising?

Unfortunately, one leading broker is calling time on the Orocobre share price rise.

A note out of Bell Potter this morning reveals that its analysts have resumed coverage on the company with a hold rating and $9.30 price target.

This is broadly in line with the current Orocobre share price of $9.35.

What did the broker say?

Bell Potter appears to be a fan of Orocobre. Particularly following its merger with Galaxy Resources, which it notes makes it a top give global lithium producer.

Bell Potter commented: “The ORE-GXY merger has formed one of the largest ASX-listed pure-play lithium producers. ORE now has projects spanning Australia and the Americas producing spodumene concentrate from hard rock and lithium carbonate from brine assets. ORE will soon also have downstream processing capacity in Japan to convert lithium carbonate into battery grade lithium hydroxide.”

The broker also sees the company, which will soon be rebranded as Allkem, as the go-to investment for the decarbonisation theme.

It explained: “ORE is the go-to investment for multi-project exposure to lithium markets and the decarbonisation theme in general. A tight supply outlook has resulted in lithium prices lifting to several-year highs; as a current producer, ORE’s cash flows should benefit before any potential supply-driven correction.”

“We expect government policy, company strategy and media momentum will continue focus on decarbonising technologies which are favourable for lithium demand and pricing sentiment. ORE’s rebranding to Allkem has already signalled a strong ESG focus and culture,” the broker added.

However, Bell Potter feels that the Orocobre share price is fully valued after its strong run.

As a result, it feel investors should keep their powder dry for the time being and has put a hold rating on its shares.

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Motley Fool contributor James Mickleboro owns shares of Orocobre Limited. 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 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 Bruce Jackson.

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