If you have a high tolerance for risk, then it could be worth listening to what analysts at Bell Potter are saying about the ASX stock in this article.
That's because big rewards could be on the way for buyers of this speculative stock if the broker's recommendation proves accurate.
Which ASX stock?
The stock that Bell Potter is tipping as a high-risk buy is Talga Group Ltd (ASX: TLG).
It describes itself as a global leader in producing high-power, sustainable battery anode and advanced graphitic materials.
It notes that its capabilities include proprietary graphite purification, shaping and coating technologies, ensuring secure and low-emission Li-ion battery anode supply chains and new-energy materials.
Bell Potter notes that it recently attended a site visit to its proposed Natural Graphite Anode plant location and EVA Qualification plant in Lulea, Sweden. This plant will be using ore from its Vittangi project, which the broker is very positive on. It said:
The ore body characteristics of Vittangi (high-grade & crystallinity and fine flake) make it attractive for battery anodes. However, TLG's advantage doesn't stop at the minegate. The in-house R&D teams, which operate primarily out of Cambridge, have developed significant IP around coating, shaping, and anode recycling technology.
We spent time understanding these processes, and the businesses new Talnode-R product which is created from production scrap and black-mass graphite, offering a new range of possibilities for blending and performance. Recent partnerships with US Catalytic recycler UCC and the lodging of US patents for Talnode-C open up potential new pathways for production.
Big return potential
According to the note, the broker has retained its speculative buy rating and $1.00 price target on the ASX stock.
Based on its current share price of 44.5 cents, this implies potential upside of 125% for investors over the next 12 months.
If Bell Potter is on the money with this recommendation, a $2,500 investment in Talga shares would turn into approximately $5,625 by this time next year.
Commenting on its speculative buy recommendation, the broker said:
We maintain our speculative Buy rating and valuation of $1.00/sh fully diluted and funded. Key milestones over the next 6-12 months which support our thesis for TLG include: 1) binding offtake for ~75% of production; 2) project funding and a Final Investment Decision (FID, BPe 60/40 debt/ strategic + public equity 2HCY25); and 3) construction commencement (BPe late 2HCY25).
