S&P/ASX 200 Index (ASX: XJO) lithium stock IGO Ltd (ASX: IGO) counts as the preferred pick in the lithium space for broker UBS.
The lithium share is among a slowly growing handful of miners that are actually producing the battery-critical metal. Most are still in the exploration and project development stages.
The IGO share price is joining the broader market in selling off today, with shares down 3.4% to $15 apiece.
But don't feel too bad for longer-term shareholders.
The ASX 200 lithium stock remains up 55% over the past 12 months. And that's not including the 19 cents in fully franked dividends paid out over the year.
What's UBS forecasting for the IGO share price?
With a price target of $19 on the stock, UBS analysts believe the IGO share price could gain 26% from today's levels.
According to the broker (courtesy of The Australian Financial Review), "We remain positive both lithium and copper into the medium to long term on increasingly attractive supply and demand fundamentals."
UBS is a lot less bullish on the outlook for iron ore.
"We remain cautious iron ore on a growing market surplus. While China stimulus is likely, we do not expect it to materially lift demand," the broker noted.
And UBS isn't alone in expecting a boost from the IGO share price.
Goldman Sachs is also bullish on the ASX 200 lithium stock, with a $16.10 price target on it shares.
Pointing to its growth outlook, Goldman said that IGO has "strong growth versus our broader mining coverage".
The broker is also positive on IGO's relatively low production costs.
According to Goldman Sachs:
While on our view of declining lithium prices into 2024/25 we continue to expect that low cost producers with growth optionality & vertical integration will be more defensive and best placed for future opportunities, with Allkem and IGO (Buy) remaining our relative preferences in the sector.
How has this ASX 200 lithium stock performed longer-term?
As mentioned up top, the IGO share price is up an impressive 55% since this time last year.
If you bought shares in the ASX 200 lithium stock two years ago, you'll be sitting on gains of 88% today, not including dividends.
