The Argosy Minerals Limited (ASX: AGY) share price was a strong performer in 2022.
During the 12 months, as you can see below, the lithium producer's shares rose an impressive 78%.
Can the Argosy Minerals share price keep rising?
The good news for investors is that one leading broker believes Argosy Minerals shares can rise further in 2023.
According to a recent note out of Canaccord Genuity, its analysts have a speculative buy and 85 cents price target on the Argentina-based lithium producer's shares.
Based on the current Argosy Minerals share price of 65.2 cents, this implies potential upside of 30% for investors over the next 12 months.
What did the broker say?
Canaccord Genuity highlights that Argosy Minerals recently produced its first battery quality lithium carbonate during commissioning at its 2,000tpa Rincon operation. It believes the production of 250kg of 99.76% lithium carbonate "represents a significant validation of its production process."
And while the broker acknowledges that there is still work to be done, it has been pleased with its progress so far. The broker commented:
The company must now ramp up to nameplate capacity over the first half of 2023 and maintain quality metrics. However, it marks the transition of AGY becoming a producer of lithium carbonate, one of only two ASX-listed companies to do so to date.
Canaccord Genuity also provided investors with an idea of what to expect from the company's financials in 2023 in 2024. It is forecasting EBITDA of $50 million on revenue of $68.8 million in FY 2023 and EBITDA of $62.5 million on revenue of $82.7 million in FY 2024.
Though, the broker sees scope for higher earnings if lithium prices don't soften as much as it is forecasting. It explained:
We have trimmed our sales number for 2023E leading to a 25% fall in EBITDA to A$50m. […] If we were to run a spot price of US$67,350/t as a scenario, our 2023E EBITDA would lift 66% to A$83m and our 2024E EBITDA would lift 117% to A$137m.
All in all, the broker appears to see Argosy Minerals as a top option in the lithium space for investors with a high tolerance for risk.
