ASX lithium stocks have experienced plenty of volatility over the last few years.
This has been influenced by oversupply and changes in the EV sector.
However the team at Macquarie have placed an attractive price target and outperform rating on Elevra Lithium Ltd (ASX: ELV).
Its share price is rocketing 9% higher today and Macquarie believes the share price can continue to rise in the next 12 months.
Elevra Lithium engages in the exploration, development, and mining of lithium raw materials.
Its portfolio includes projects in Québec, Canada, United States, Ghana and Western Australia.
Let's see what's behind the optimistic view.
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Pricing in line – costs beat
The broker noted that the miner reported an average sales price of A$1,198/t (US$784/dmt) in the quarter, in line with MQe and 14% higher QoQ.
It said cash operating costs of A$1,250/t were 34% lower than its estimates, which was assisted by inventory build.
ELV boasts strong operating leverage backed by a solid balance sheet. We note the company ended 1QFY26 with a cash balance of A$149m, reflecting an A$69m equity placement and $52m cash from Piedmont following the merger transaction.
The broker said while Elevra Lithium's investment appeal could be distracted by the recent business consolidation, business name and ticker changes, it sees valuation upside in the company.
As one of the only two notable lithium producers in North America, Elevra Lithium could attract valuation premium given US government's pursuit for critical mineral supply security according to Macquarie.
Attractive price target for ASX lithium stock
Macquarie has an outperform rating on this ASX lithium stock.
It said it sees the company as a leveraged lithium play supported by its improved balance sheet, offering unique exposure in a upswing lithium market.
It also has a price target of $5.20.
Based on today's share price of $4.26, this indicates an upside of 22%.
It's not the only broker with a positive view on the company.
Bell Potter has a buy rating and $7.35 price target.
TradingView also has a price target of $7.35 which indicates an upside of more than 70%.
