Shares in Allkem Ltd (ASX: AKE) managed to clip a 60% gain in FY22, despite incurring heavy losses at the back end of the period.
Our attention now turns to FY23 and there's plenty of external forces that have just arrived on the doorstep of the ASX.
Allkem is at $9.64 per share ahead of the market open on Thursday, after sliding 6% in the past month.
What's in store for Allkem in FY23?
ASX lithium shares are showing signs of strength in June. Allkem shares have rebounded off lows twice in the past two weeks as lithium prices remain high.
Long-term demand for lithium is tipped to remain strong by Shaw & Partners, potentially offering long-term upside for investors also.
UBS analysts have retained their buy rating. In a recent note, they valued the stock at $15.55 per share.
The UBS team is constructive on Allkem's free cash flow projections and tips high lithium prices to underpin this.
Macquarie is also bullish on Allkem, valuing the shares at $17 with a buy recommendation. The broker is also constructive on the long-term lithium outlook.
This is certainly good for market sentiment on Allkem, that's for sure.
In terms of coverage, 10 analysts rate Allkem a buy right now. Three brokers urge their clients to hold, according to Refinitiv Eikon data.
From this list, the consensus price target is $16, offering roughly $6.50 per share in upside potential.
While analysts are bullish, the market is dislocated from this view.
Investors have recently pushed the stock to three-month lows.
Despite this, the Allkem share price has increased by 32.8% over the past 12 months.
