Top broker tips Vulcan Energy (ASX:VUL) share price to more than double

This lithium share could be in the buy zone…

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

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The Vulcan Energy Resources Ltd (ASX: VUL) share price has been an exceptionally strong performer in 2021.

Since the start of the year, the lithium explorer’s shares have risen a remarkable 250% to $9.72.

This is despite the company being targeted by a short seller in recent months.

Can the Vulcan Energy share price keep rising?

One leading broker isn’t worried by the short seller attack and continues to tip the Vulcan Energy share price to rise further.

According to a recent note out of Canaccord Genuity, its analysts have retained their buy (speculative) rating and $21.00 price target on the company’s shares.

Based on the current Vulcan Energy share price, this implies potential upside of 116% for investors over the next 12 months.

What did the broker say about this lithium share?

Canaccord Genuity notes that the company has just signed a binding offtake agreement with automotive giant Stellantis.

Stellantis is the name behind popular car brands including Peugeot, Citroen, Fiat, Chrysler, Jeep, Abarth, Alfa Romeo and Maserati.

The broker commented: “Vulcan has announced that it has signed a binding offtake agreement with Stellantis for 81-99kt of lithium hydroxide over five years from 2026. We believe this is the largest hydroxide offtake agreement by tonnage signed globally to date and represents a significant step in Vulcan securing its customer pipeline with tier 1 customers.”

What else?

Outside this latest development, Canaccord Genuity is positive on the Vulcan Energy share price due to the company’s potential to supply the European market with lithium.

The broker explained: “We reiterate our support for the [Zero Carbon Lithium] project given its potential to: supply lithium to the European market; fundamentally shift the lithium industry carbon cost curve; and produce high quality lithium products at low unit costs.”

Should you invest $1,000 in Vulcan right now?

Before you consider Vulcan, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Vulcan wasn't one of them.

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*Returns as of January 13th 2022

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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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