Due to the decarbonisation megatrend, many investors are no doubt interested in gaining exposure to the lithium industry.
But which lithium stocks should you consider buying? Two ASX lithium stocks that are rated as buys are listed below. Here's what analysts are saying about them:
Allkem Ltd (ASX: AKE)
The first ASX lithium stock to consider is Allkem. It is one of the world's largest lithium miners with projects spanning across Argentina, Australia, and North America. From these projects, the company is aiming to maintain a 10% share of global lithium supply over the long term.
According to a recent note out of Morgans, its analysts are bullish on Allkem and have an add rating and $16.72 price target on its shares. Based on the current Allkem share price of $12.05, this implies potential upside of 39% for investors over the next 12 months.
It commented:
AKE holds long lived brine assets that are well leveraged to the lithium carbonate price and Mt Cattlin looks to be highly profitable for its remaining life with high exposure to the spot market. Additionally the Naraha plant will give the company exposure to lithium hydroxide prices in addition to spodumene and carbonate. We believe that the strong cash flows we're anticipating in FY23 will make the value proposition more compelling than the uncertainties of the lithium market.
Liontown Resources Limited (ASX: LTR)
Another ASX lithium stock that is rated highly is Liontown Resources. It is a lithium developer which owns the Kathleen Valley and Buldania projects in Western Australia.
A note out of Bell Potter reveals that its analysts have a speculative buy rating and $2.87 price target on the company's shares. Based on the current Liontown share price of $1.70, this suggests potential upside of 69% for investors over the next 12 months.
Bell Potter commented:
LTR is fully funded for Kathleen Valley's initial development capital where a definitive feasibility study outlined 658ktpa SC6 production and potential for conversion into 86ktpa lithium hydroxide. LTR is independent and in a strong strategic position in a market for lithium facing supply shortages.
