Buy Pilbara Minerals and these ASX lithium shares for big returns

Analysts believe these lithium stocks could rise strongly from current levels.

| More on:
A man checks his phone next to an electric vehicle charging station with his electric vehicle parked in the charging bay.

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

The lithium industry has come under significant pressure over the last 12 months due to falling battery materials prices.

While this is disappointing, it could have created a buying opportunity for investors.

For example, listed below are three ASX lithium shares that analysts are bullish on:

Arcadium Lithium (ASX: LTM)

There could be big returns on offer with this lithium giant according to analysts at Bell Potter. The broker has a buy rating and $10.40 price target on the ASX lithium share.

Its analysts are bullish due to its diversified exposure to lithium. They said:

LTM provides the largest, most diversified exposure to lithium in terms of mode of upstream production, asset locations, downstream processing and customer markets. It is a key large-cap leverage to lithium prices and sentiment, which we expect to improve over the medium term. The group has a strong balance sheet and growth portfolio.

Liontown Resources Ltd (ASX: LTR)

The team at Bell Potter also sees a huge amount of value in this lithium developer. The broker currently has a speculative buy rating and $1.90 price target on its shares.

It was very pleased with the company's recent funding news and highlights that its Kathleen Valley (KV) lithium project has a lot of strategic value. It said:

With the near-term funding overhang reduced, we have lifted our LTR valuation to $1.90/sh (previously $1.60/sh). LTR's 100% owned KV lithium project remains highly strategic in terms of its stage of development, long mine life and location. LTR has offtake contracts with top tier EV and battery OEMs (Ford, LG Energy Solution and Tesla). Hancock Prospecting has a 19.9% interest in LTR. LTR is an asset development company; our Speculative risk rating recognises this higher level of risk.

Pilbara Minerals Ltd (ASX: PLS)

Finally, analysts at Morgans are feeling very positive on this lithium giant. The broker currently has an add rating and $4.30 price target on the ASX lithium share.

It supports the company's decision to grow production during these tough times. It said:

We view PLS as a fundamentally strong and globally significant hard-rock lithium miner. The company has successfully executed on ramping up the expansion of Pilgangoora, while progressing plans to expand output (P680 and P1000). Supported by a strong balance sheet, with net cash at ~A$2.1bn at the end of December, PLS' expansion plans remain uniquely undeterred by the significant weakness in lithium prices. For PLS, the best form of defence against lithium prices is to stay on the attack, with its medium-term plans to continue expanding its production aimed primarily at building greater economies of scale and a more defensive margin.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 man rests his chin in his hands, pondering what is the answer?
Materials Shares

Are Liontown shares dirt cheap and a screaming buy in April?

One leading broker believes investors could generate big returns from this lithium stock.

Read more »

Image of young successful engineer, with blueprints, notepad and digital tablet, observing the project implementation on construction site and in mine.
Materials Shares

Why are Rio Tinto shares outperforming the market on Wednesday?

Why are investors buying this mining giant's shares today?

Read more »

two men shake hands on a deal.
Materials Shares

Novonix shares fall despite Lithium Energy merger and IPO plans

These two companies are planning to merge their graphite operations.

Read more »

A man wearing a hard hat and high visibility vest looks out over a vast plain where heavy mining equipment can be seen in the background.
Materials Shares

What is the outlook for Pilbara Minerals shares in April?

Can this stock recharge returns from here?

Read more »

A miner in a hardhat makes a sale on his tablet in the field.
Materials Shares

Why has the lithium price quietly risen 20% in 2024?

After an 80% plummet in the lithium carbonate price last year, is there hope on the horizon?

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Materials Shares

Novonix share price booming 5% on cracking tax credit

The battery technology business won't be worrying about a big tax bill after securing this government handout.

Read more »

Woman in yellow hard hat and gloves puts both thumbs down
Materials Shares

Why is this ASX mining stock sinking 47% to a record low?

This mining stock is hitting new lows on Tuesday. But at least it is trading again.

Read more »

A mining employee in a white hard hat cheers with fists pumped as the Hot Chili share price rises higher today
Materials Shares

ASX mining in April 2024: The best stock to buy right now

Analysts at Bell Potter think this mining stock could offer big returns.

Read more »