The Allkem Ltd (ASX: AKE) share price is on form again on Tuesday.
Earlier today, the lithium miner's shares were up 3% to a new record high of $16.02.
This means the Allkem share price is now up 42% in 2022.
Why is the Allkem share price rising again?
The catalyst for the rise in the Allkem share price today appears to be a bullish broker note out of Bell Potter.
According to the note, the broker has retained its buy rating and lifted its price target on the company's shares to $20.04.
Based on where its shares trade at today, this implies potential upside of 25% for investors over the next 12 months.
What did the broker say?
Bell Potter has lifted its lithium price estimates for the coming years, as covered here.
This has ultimately underpinned a 20% increase in the broker's earnings estimates for Allkem in both FY 2023 and FY 2024. It is now expecting a net profit after tax of US$904 million in FY 2023 and then US$1.1 billion in FY 2024.
Bell Potter commented:
We have updated our EV-led lithium demand model with no change to our bullish outlook; LCE demand to grow from around 0.5Mtpa in 2021 to over 1.1Mtpa in 2025 and around 3.0Mtpa in 2030. Supply analysis shows that over the next five years, Australian hard rock projects will at best meet only one third of this demand growth. We expect alternative sources of supply to remain relatively constrained and high-risk.
We expect AKE's cash generation to lift substantially into 2023 with ongoing strength in lithium demand, commodity prices and production growth. AKE is aiming to maintain 10% share of supply in a global lithium market experiencing unprecedented growth; it has a portfolio of growth projects, balance sheet strength and cash flow from existing projects to achieve this. AKE's portfolio is also diversified across lithium commodity, mode of production, asset location and end-user country.
