Experts name 3 of the best ASX lithium stocks to buy now

These lithium stocks are hot property…

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A group of four people pose behind a graphic image of a green car, holding various symbols of clean electric, lithium powered energy including energy symbols and a green plant representing the rising Vulcan Energy share price

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If you’re looking for exposure to the lithium sector, then you may want to check out the three shares listed below.

These lithium shares have been named as buys with material upside potential from current levels. Here’s what you need to know:

Allkem Ltd (ASX: AKE)

The team at Morgans believe this lithium miner could be the best option in the space right now. Its analysts currently have an add rating and $13.25 price target on the company’s shares.

The broker commented: “AKE is a pure play lithium producer with diversified products (spodumene, LiCO and borax) and geographies (WA and Argentina) that is set to expand. The almost completed Naraha plant will allow AKE to grow vertically into the lithium hydroxide market, supported by increased Argentinian brine production. The lithium market has seen strong price increases in CY21 but we don’t see signs of a break to this momentum yet. We expect EV demand to remain strong with geopolitical events and a potentially tight oil market accelerating the shift towards electrification.”

Liontown Resources Limited (ASX: LTR)

Another lithium share to consider is Liontown. Bell Potter is very positive on this lithium developer and has a speculative buy rating and $3.06 price target on its shares. Its analysts note that the company has recently signed a deal with auto giant Tesla, which means that Liontown has sales agreements locked in for more than half of its planned production.

Bell Potter commented: “LTR has entered a binding term sheet with Tesla for supply of up to 150ktpa spodumene concentrate from the Kathleen Valley project, adding to an agreement last month with major global battery producer LG Energy Solution (LGES). LTR now has binding term sheets in place for over half of the expected initial production from Kathleen Valley, with offtake pricing linked to market prices for lithium hydroxide. Lithium price upgrades increase our LTR valuation to $3.06/sh.”

Vulcan Energy Resources Ltd (ASX: VUL)

This lithium developer could another lithium share to buy. The team at Germany-based Alster Research currently has a buy rating and $20.00 price target on the company’s shares. The broker believes that Vulcan is well-placed to benefit from geothermal energy demand and its massive Zero Carbon Lithium project, which is aiming to service the European car market.

It commented: “Aside from the future production of carbon neutral lithium, Vulcan produces geothermal energy and heat. Clearly, Vulcan would benefit from an increasing penetration of geothermal energy by streamlined regulatory procedures, as it would simultaneously help identify and develop the lithium deposits within the granted licenses. In terms of acceptance, Vulcan is already making efforts on its own initiative to convince policymakers and the public of the merits of the technology. Overall, we expect the conditions for Vulcan to receive a further impetus not only due to the conflict, but also due to the fulfillment of climate targets.”

Motley Fool contributor James Mickleboro owns Allkem. 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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