One of the hottest areas of the market right now is the lithium sector.
The good news is that although strong gains have been recorded in the sector, analysts believe the lithium shares listed below still have the potential to rise further.
Here's why analysts have put buy ratings on these ASX lithium shares:
Allkem Ltd (ASX: AKE)
Allkem is the lithium giant that was formed following the merger of Galaxy Resources and Orocobre. It has a collection of world class operations and projects across Western Australia, Argentina, and Canada. The team at Citi is positive on Allkem. It expects the company to benefit greatly from sky high lithium prices in 2022. As a result, this morning the broker retained its buy rating and lifted its price target on the company's shares to $13.40. This compares to the current Allkem share price of $11.09.
Lake Resources N.L. (ASX: LKE)
Another ASX lithium share that is rated as a buy is Lake Resources. It is the company developing the Kachi lithium brine project in north-western Argentina. This morning Lake revealed that its base case production plan is now 50,000 tonnes of lithium carbonate per annum. This was almost double previous plans and was driven by insatiable demand for the clean energy material. Bell Potter is a fan of the company and has a speculative buy rating and $1.37 price target on its shares. This compares favourably to the latest Lake share price of 99 cents.
Mineral Resources Limited (ASX: MIN)
A final ASX lithium share that could be in the buy zone is Mineral Resources. It has exposure to lithium through its Mt Marion Lithium and Wodgina Lithium projects. The latter is one of the largest known hard rock lithium deposits in the world with a production life of over 30 years. Macquarie is bullish on Mineral Resources due to its belief that lithium prices will remain at record levels for a number of years. It has an outperform rating and $79.00 price target on its shares, which compares nicely to the current Mineral Resources share price of $64.43.
