If you're looking for exposure to the lithium sector, then you may want to check out the two ASX shares listed below.
These lithium shares have been named as buys with huge upside potential from current levels. Here's what you need to know:
Allkem Ltd (ASX: AKE)
The team at Morgans believe this lithium miner is the best option in the space right now. Its analysts recently put an add rating and $13.25 price target on the company's shares. This compares favourably to the current Allkem share price of $9.90.
The broker commented:
Our preferred stock for lithium exposure, Allkem. AKE announced a 68% qoq increase in revenue at Olaroz and a 7% CY21 beat of production guidance at Mt Cattlin with large increases in realised prices at both projects. AKE expects USD20k/t for lithium carbonate sales in 2HFY22 at Olaroz. Production growth continues with Naraha commissioning, progress on Sal de Vida and FID expected on James Bay in 2QCY22. Construction is expected to commence the following quarter.
Vulcan Energy Resources Ltd (ASX: VUL)
This lithium developer could be the best value lithium share if the team at Germany-based Alster Research are on the money with their recommendation. The broker currently has a buy rating and $25.00 price target on the company's shares. This is more than double the latest Vulcan share price of $9.70.
It commented:
At this point, Vulcan has marketed its initial production volumes for the first 5-6 years. We expect the upcoming definitive feasibility study (DFS) to create some leeway. In the near term, we expect the admission to FSE as a catalyst for the stock, as future capital increases will be accessible to a broader audience. Thus, liquidity and interest will most likely increase. We confirm our PT of AUD 25.00, equivalent to EUR 15.81, and reiterate our BUY recommendation.
