What could $10,000 invested in Allkem shares be worth in a year?

Will this lithium share deliver strong returns over the next 12 months?

| More on:
Man holding out Australian dollar notes, symbolising dividends.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Allkem Ltd (ASX: AKE) shares have had a difficult time over the last 12 months.

Despite receiving a merger proposal from Livent Corp (NYSE: LTHM), the lithium miner's shares are down approximately 25% since this time last year. This can be seen on the chart below.

While that is disappointing, a few leading brokers appear to see this as a buying opportunity.

In fact, if you were to invest $10,000 into Allkem shares today, these brokers think you could do very well for yourself over the next 12 months.

Investing $10,000 into Allkem shares

Firstly, with the Allkem share price currently fetching $11.78, we would end up with 849 units if we were to invest $10,000 into the lithium miner.

According to a recent note out of Goldman Sachs, despite being bearish on lithium prices, its analysts have a buy rating and a $17.20 price target on its shares. If they were to rise to this level, our 849 Allkem shares would have a market value of $14,602.80. That's a return of approximately $4,600 on our original investment.

The team at Bell Potter is even more bullish. Its analysts currently have a buy rating and a $19 price target on its shares. Were the Allkem share price to climb to that level, our shares would be worth a cool $16,131. That's a gain of $6,131 on our investment.

Finally, analysts at Macquarie currently have an outperform rating and a $19.60 price target on its shares. This suggests that our 849 units could be worth $16,640.40 by this time next year. Not bad if you ask me!

However, it is worth remembering that lithium shares are very volatile. And with lithium prices recently pulling back, investor sentiment isn't overly strong in the industry right now. So, these returns are far from guaranteed.

Motley Fool contributor James Mickleboro has positions in Allkem. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

A woman screams and holds her hands up in frustration.
Materials Shares

Why are Allkem shares down 11% in November?

This lithium miner's shares were out of form this month/

Read more »

A man slumps crankily over his morning coffee as it pours with rain outside.
Materials Shares

Core Lithium shares sink 8% on broker downgrade

The team at Citi thinks investors should be selling this lithium miner's shares.

Read more »

A businesswoman ponders why her boat is sinking in the ocean.
52-Week Lows

Lake Resources share price falls 7% to new 52-week low amid second strike AGM vote

Chair Stu Crow described "a year of significant progress" amid an 80% decline in the share price in 2023.

Read more »

A worried man holds his head and look at his computer.
Materials Shares

Sayona Mining shares sink to new 52-week low following AGM update

This lithium miner continues to sink deep into the red.

Read more »

A man in a hard hat and high visibility vest holds his thumb up in a gesture of confidence with heavy moving equipment in the background as on a mine site as the Chalice Mining share price rises today.
Materials Shares

Dreadnought share price jumps on 'tier 1 project' potential

This mineral exploration company could be sitting atop a tier one rare earths project.

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Materials Shares

Guess which ASX mining stock is up 92% thanks to a potentially 'significant discovery'

This copper explorer is getting investors excited today. But why?

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Materials Shares

Liontown shares are down 17% in a month: What's going on?

This lithium share has failed to roar in recent weeks.

Read more »

A man wearing a shirt, tie and hard hat sits in an office and marks dates in his diary.
Materials Shares

Own Rio Tinto shares? Add these dates to your diary in 2024

Here's what Rio Tinto has planned for next year.

Read more »