Broker tips huge upside for this insanely hot ASX lithium share

The big gains may not be over for this hot stock.

James Mickleboro

Author Bio
James Mickleboro is an investment writer and analyst who has worked with The Motley Fool Australia for 10 years, covering ASX shares, market news, broker research, dividends, growth stocks, and long-term investing ideas.

Over that time, James has written extensively about Australian equities and developed a particular focus on helping everyday investors understand the stories behind share price moves, company announcements, broker views, and broader market trends.

His best investment recommendation was identifying Afterpay while it was still a small-cap growth share, before its rise into one of Australia’s biggest technology success stories. His worst investment lesson came from CSL Ltd (ASX: CSL), where he was burnt by believing management could turn the business around sooner than the market ultimately allowed.

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James is the founder of Evermore Asset Management, which focuses on undercovered global stocks.

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"It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price."
— Warren Buffett

Published August 8, 2023 8:34 am AEST

One of the hottest stocks on the Australian share market this year has been Azure Minerals Ltd (ASX: AZS).

Since the start of the year, the ASX lithium share has risen over 1,000%.

To put that into context, this would have turned a $10,000 investment into $110,000.

But if you thought the gains were over, then think again! That's because one leading broker has just tipped this ASX lithium share to almost double from current levels.

Concept image of a man in a suit with his chest on fire. — Image source: Getty Images

What is being said about this hot ASX lithium share?

According to a note out of Bell Potter, its analysts have retained their speculative buy rating and increased their price target by 72% to $5.15 (from $3).

Based on the current Azure Minerals share price of $2.67, this implies a potential upside of 93% over the next 12 months.

The broker made the move in response to recent updates from the 60% owned Andover Lithium Project in Western Australia.

Bell Potter feels that these updates point to the project being comparable to the Wodgina Lithium Project owned by Mineral Resources Ltd (ASX: MIN) and Kathleen Valley owned by Liontown Resources Ltd (ASX: LTR). It explains:

With this update we increase our valuation 71.7% to $5.15/sh, and we maintain our Speculative Buy recommendation in accordance with our ratings structure, given our forecast TSR of 93.6%. Lithium Mineral Resources of +200Mt scale support Australia's large market capitalisation lithium producers and project developers. The Exploration Target highlights Andover's potential to host another Western Australian Tier-1 lithium project (+200Mt scale) like Wodgina (MIN, Buy, Target Price $90.0/sh) and Kathleen Valley (LTR, Spec. Buy, Val$3.35/sh).

AZS offers exposure to a very-high potential WA lithium exploration project, in the early stages of discovery. We think it's undervalued given the clear upside that Andover could support a globally significant Tier-1 lithium mining operation, in the Tier-1 mining jurisdiction of Western Australia.

All in all, this could be an ASX lithium share to keep a very close eye on.

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