The Lake Resources (ASX: LKE) share price was a strong performer on Monday.
The lithium developer's shares ended the day 7% higher at $1.99 thanks to the announcement of an offtake agreement with auto giant Ford. This was the second agreement of its kind in as many weeks.
Following yesterday's gain, the Lake Resources share price has now risen 82% in 2022.
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Where next for the Lake Resources share price?
The good news for investors is that one leading broker believes the Lake Resources share price can still climb a lot higher from here.
According to a note out of Bell Potter this morning, the broker has retained its speculative buy rating and lifted its price target by 55% to $2.83.
Based on the current Lake Resources share price, this implies potential upside of 42% for investors over the next 12 months.
What did the broker say?
Bell Potter was pleased to see the company sign another offtake agreement, noting that it now has exposure to both Japanese and North American electric vehicle markets.
It commented:
"LKE has now announced two non-binding Memorandum of Understandings covering all of the proposed 50ktpa initial lithium product offtake from its Kachi Project (LKE 75%). The Hanwa Co., Ltd non-binding MoU (announced 29 March 2022) for 25ktpa will potentially align LKE with Japanese battery and auto manufacturers. Today's announced non-binding MoU with Ford Motor Corporation covering 25ktpa adds a further highly credible potential counterparty with a focus on North American markets.
The agreements and the counterparties add support to ongoing financing and predevelopment activities for Kachi. They also highlight auto manufacturers' increased interest in participating further up the battery minerals supply chain and with an eye to the ESG credentials of raw materials providers."
As for its valuation, the broker has bumped up its price target on the Lake Resources share price materially to reflect a lowering of its risk profile.
It explained:
"LKE's key project is the 50ktpa lithium carbonate Kachi Lithium Brine Project in Argentina. This project is expected to employ direction lithium extraction technology which has enormous ESG benefits compared with incumbent brine and hard rock lithium production methods. […] we have upgraded our valuation to $2.83/sh (previously $1.82/sh) through a reduction in risk discount."
