Four ASX shares that are falling more than most today are listed below. Here's why they are dropping:

Arcadium Lithium (ASX: LTM)

The Arcadium Lithium share price is down almost 8% to $10.03. This has been driven by a similarly large decline from Livent Corp (NYSE: LTHM) shares on Wall Street during overnight trade. Arcadium Lithium is the result of the almost complete merger between Allkem Ltd (ASX: AKE) and Livent Corp.

Brainchip Holdings Ltd (ASX: BRN)

The Brainchip share price is down 4.5% to 16.7 cents. Investors have been selling this embattled semiconductor company's shares this week after it announced another capital raising via a new put option agreement. Brainchip is raising $12 million to ensure the lights stay on while it struggles to make any meaningful sales in a market dominated by tech giants.

Megaport Ltd (ASX: MP1)

The Megaport share price is down 2% to $8.82. This appears to have been driven by broad weakness in the tech sector today following another poor session on the tech-focused Nasdaq index. The Nasdaq index ended the session 1.2% lower. This was its fourth consecutive session of declines.

Northern Star Resources Ltd (ASX: NST)

The Northern Star share price is down 2.5% to $12.84. This follows further weakness in the gold sector after another pullback in the gold price overnight. This has led to the S&P/ASX All Ordinaries Gold Index (ASX: XGD) falling a further 1.7% this afternoon.

The post Why Arcadium Lithium, Brainchip, Megaport, and Northern Star shares are dropping appeared first on The Motley Fool Australia.

Over the course of the year, the lithium miner's shares lost approximately 12% of their value.

But considering some of the declines in the industry, this wasn't a bad outcome for investors.

Though, that's not the full story.

It is worth noting that Allkem shares were suspended from trade from 21 December in relation to its merger with Livent Corp (NYSE: LTHM).

The following day, Arcadium Lithium (ASX: LTM) shares commenced trade on the ASX boards on a deferred basis.

They then went on a strong run and ended the year at $11.21, which was just a touch lower than where Allkem shares started 2023.

So, all in all, you could call it a flat year for shareholders, which isn't bad all things considered.

What could be in store for Allkem shares in 2024?

Firstly, Allkem shares are no more, so there's no outlook for them.

But what about Arcadium Lithium shares? Well, they haven't started 2024 in an overly positive fashion.

In fact, following a sharp decline by Livent Corp's shares overnight, Arcadium Lithium shares are down 8% to $10.01 this morning. This stretches their year to date decline to over 9%.

What happens from here is likely to be driven by lithium prices. If prices rebound strongly in 2024, then lithium shares could rally.

However, many analysts are expecting the lithium market to be in surplus for the next two years due to an oversupply of the battery-making ingredient. This could mean that prices are held down for longer, which may not bode well for the industry.

Though, it is worth remembering that a lot can change in a short time in the mining sector. So, there's always a chance for a surprise, but I certainly wouldn't bet big on it happening.

The post What's the outlook for Allkem shares in 2024? appeared first on The Motley Fool Australia.

At the time of writing, the lithium miner's shares are up slightly to $10.60.

This means that its shares are now up 16% since this time last week.

However, this strong run will be forced to come to an end on Friday. That's because shareholders have just approved the company's merger with Livent Corp (NYSE: LTHM).

This approval means that before the market open on Friday, Allkem shares will be suspended from the Australian share market and replaced with the CHESS Depositary Interests (CDIs) of the merged entity.

This will see Arcadium Lithium plc CDIs (ASX: LTM) land on the ASX boards during Friday's session.

Allkem shares higher on shareholder vote

While not all shareholders were pleased with the terms of the merger with Livent Corp, that couldn't stop the deal from being approved at yesterday's scheme meeting.

According to the release, 89.27% of the total number of votes cast by Allkem shareholders were in favour of the scheme.

Commenting on the merger, Allken's managing director and CEO, Martin Perez de Solay, said:

Arcadium Lithium will have the scale and expertise to meet the rapidly growing demand for lithium chemical products and the product flexibility required by customers while remaining committed to the delivery and execution of a significant growth pipeline.

Allkem's Chairman, Peter Coleman, adds:

The combination of Allkem and Livent is expected to create a highly complementary and vertically integrated business model to enhance operational flexibility and reliability, which is expected to result greater value capture across the lithium value chain.

What's next?

Livent shareholders also approved the merger yesterday, which means that Allkem will now apply to the Federal Court of Australia for approval of the scheme at a hearing today.

If all goes to plan, a copy of the court orders will be lodged with ASIC tomorrow and the scheme will become effective. Allkem shares will then be suspended from trade at the close of play on Thursday, with Arcadium Lithium shares commencing trade on Friday.

The post Allkem shares higher on merger approval news: what's next? appeared first on The Motley Fool Australia.

Will the market be able to build on this on Wednesday? Here are five things to watch:

ASX 200 expected to rise again

The Australian share market looks set for another good session on Wednesday following a solid night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 42 points or 0.55% higher this morning. In late trade on Wall Street, the Dow Jones is up 0.55%, the S&P 500 has risen 0.5%, and the Nasdaq is 0.5% higher.

Oil prices rise

It could be a good session for ASX 200 energy shares such as Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) after oil prices pushed higher overnight. According to Bloomberg, the WTI crude oil price is up 1.5% to US$73.58 a barrel and the Brent crude oil price is up 1.65% to US$79.24 a barrel. Oil prices rose in response to Red Sea attacks.

Miners on watch

BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO) look set to have another positive session on Wednesday after storming higher on Wall Street overnight. Both miners are likely to hit new 52-week highs today.

Gold price higher

ASX 200 gold shares such as Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a positive session on Wednesday after the gold price pushed higher. According to CNBC, the spot gold price is up 0.6% to US$2,052.6 an ounce. This was driven by softening bond yields.

Allkem merger approved

Allkem Ltd (ASX: AKE) shares will be on watch today after shareholders voted in favour of its merger with Livent Corp (NYSE: LTHM). That vote means that the lithium miner will leave the ASX boards later this week and be replaced with the stock of the merged entity, Arcadium Lithium. This is expected to occur on Friday.

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

It's been a protracted plummet for lithium prices since they peaked in late 2022.

This week, the lithium carbonate spot price dropped to its lowest level since August 2021 at US$13,843 per tonne. That's a more than 80% fall in 2023 alone.

But over the past two days, Chinese lithium giants Tianqi Lithium Corp UP and Ganfeng Lithium Group Co Ltd have made strong gains.

Tianqi shares are up 6.1%. The stock has lost 31% of its value in the year to date. Ganfeng shares rose 6.1% over the two days, and are down by more than 40% in 2023.

US lithium stocks also moved higher over the two days.

NYSE-listed lithium stocks Albemarle Corporation gained 10.7%, Livent Corp went up 11.1% and Sociedad Quimica y Minr de Chile SA rose 6.1%.

Today, ASX lithium shares are also rising, with all the well-known names up by more than 2%.

Here are some examples:

• Core Lithium Ltd (ASX: CXO) shares are up 3.9%
• Allkem Ltd (ASX: AKE) shares are up 3.3%
• Mineral Resources Ltd (ASX: MIN) shares are up 3.1%
• Pilbara Minerals Ltd (ASX: PLS) shares are up 4.1%
• Sayona Mining Ltd (ASX: SYA) shares are up 7.4%
• Liontown Resources Ltd (ASX: LTR) shares are up 2.8%
• IGO Ltd (ASX: IGO) shares are up 2.1%.

The price pain is almost over, says analyst

Lithium prices are weak due to slowing growth in global sales of electric vehicles (EVs). This is leading to lower demand for lithium in China, the world's biggest EV manufacturer.

At the same time, the global lithium mining industry has been ramping up, and as a result, global stockpiles of the white metal have also increased.

But China Futures Co analyst Zhang Weixin said the downward trend in lithium prices is "already nearing an end".

Weixin reckons they are likely to bottom out between US$11,240 and US$12,650 per tonne (courtesy Australian Financial Review (AFR)).

Traxys advisor Wei Xiong agrees but says an extended period of weakness is still likely.

He says he'll be watching to see "whether high-cost mines will exit" if lithium prices get too low to make operations viable.

By the way, investors can find out how much it costs each miner to produce a tonne of lithium in their company reports.

At the recent Liontown Resources annual general meeting, chair Richard Goyder reminded shareholders that the estimated decade-average cost of production at Kathleen Valley was US$475 per tonne.

Thus, they'll still get "a healthy margin" despite the lithium spodumene concentrate price dropping to US$1,590 per tonne.

Goldman Sachs says lithium prices won't bottom till 2025

Top broker Goldman Sachs reckons lithium prices will finally reach a trough in 2025.

The broker recently downgraded its lithium price forecasts again.

It had been tipping US$15,000 p/t for lithium carbonate but is now forecasting US$11,000 p/t.

It was also forecasting US$16,500 p/t for lithium hydroxide but has reduced that to US$12,000 p/t.

The question is whether ASX lithium share investors should care about any of this short-term noise on lithium prices.

After all, this commodity will play a key role in the world's decarbonisation for decades.

The post Is the lithium price pain 'already nearing an end'? appeared first on The Motley Fool Australia.

In morning trade, the lithium industry is a sea of red with heavy declines being recorded across the board.

Here's a summary of how ASX 200 lithium shares are currently performing:

• The Allkem Ltd (ASX: AKE) share price is down 4% to $8.28.
• The Core Lithium Ltd (ASX: CXO) share price is down 10% to 23 cents.
• The IGO Ltd (ASX: IGO) share price is down 3.5% to $7.76.
• The Liontown Resources Ltd (ASX: LTR) share price is down 7% to $1.26.
• The Mineral Resources Ltd (ASX: MIN) share price is down 4% to $57.47.
• The Pilbara Minerals Ltd (ASX: PLS) share price is down 5.5% to $3.34.
• The Sayona Mining Ltd (ASX: SYA) share price is down 7% to 5.2 cents.

Why are ASX 200 lithium shares being sold off?

Today's weakness appears to have been driven by heavy selling in the industry on Wall Street overnight amid falling lithium prices.

Sociedad Química y Minera de Chile SA (NYSE: SQM) was one of the hardest-hit lithium stocks, dropping 8% during last night's session. Fellow giants Albemarle Corporation (NYSE: ALB) and Livent Corp (NYSE: LTHM) weren't far behind with declines of 5% and 5.5%, respectively.

Lithium prices continue to fall

According to a note out of Goldman Sachs, spot lithium prices have continued to fall since last week.

Its latest data has the following spot prices (per tonne):

• Lithium carbonate: US$16,112
• Lithium hydroxide – China: US$13,695
• Spodumene 6%: US$1,460

This means that prices have fallen 5.6%, 6.7%, and 7.6%, respectively, in the space of a week.

They are also now some distance away from their averages during the first quarter of calendar year 2023. At that point, spot prices per tonne were fetching the following per tonne:

• Lithium carbonate: US$63,232
• Lithium hydroxide – China: US$59,190
• Spodumene 6%: US$4,368

Unfortunately, Goldman sees more pain ahead and is forecasting prices to continue to soften in 2024 and 2025.

The post Why are ASX 200 lithium shares crashing today? appeared first on The Motley Fool Australia.

And while most sides of the market are rising, one area is certainly catching the eye – the lithium industry.

At present, a number of ASX lithium shares are generating strong gains for their shareholders.

Here's a summary of the movers and shakers:

• The Allkem Ltd (ASX: AKE) share price is up 6% to $9.16
• The Core Lithium Ltd (ASX: CXO) share price is up 1.5% to 38 cents
• The James Bay Minerals Ltd (ASX: JBY) share price is up 10% to 37 cents
• The Liontown Resources Ltd (ASX: LTR) share price is up 2.5% to $1.54
• The Mineral Resources Ltd (ASX: MIN) share price is up 6% to $63.33
• The Pilbara Minerals Ltd (ASX: PLS) share price is up 6% to $3.73

Why are ASX lithium shares rocketing?

While some ASX lithium shares are rising following the release of news, the general driver of these gains has been a strong gain by their peers on Wall Street overnight.

For example, Albemarle Corporation (NYSE: ALB) jumped 10% and Livent Corp (NYSE: LTHM) was up 9% in New York.

Investors were flooding back into the beaten-down lithium industry after US inflation cooled, sparking hopes that interest rate rises are now over. This could be seen as good news for the electric vehicle market, which requires lithium for batteries, as higher rates have an impact on consumer spending.

What about news?

There is also some company-specific news in the industry today, such as Allkem receiving FIRB approval for its proposed merger with Livent Corp.

In addition, James Bay Minerals revealed elevated lithium readings from the portable LIBS analyser obtained from the Hawker and Gauntlet pegmatites. This is located within the company's Aero Property.

The post Why are ASX lithium shares like Pilbara Minerals going gangbusters today? appeared first on The Motley Fool Australia.

The Australian Foreign Investment Review Board has given formal approval for the proposed merger of the United States lithium giant and Allkem to form Arcadium Lithium.

The Allkem share price hit $9.29 in early trading before settling back to $9.19 at the time of writing.

Here are some further details.

Allkem share price soars as all regulatory approvals cleared

In a statement, Allkem said the merger has now received antitrust and competition approvals in Canada, China, Japan, South Korea, and the US.

It also has foreign investment approval in the United Kingdom, the US, and now, Australia.

The company said: "This represents all competition and foreign investment approvals that are expected to be required prior to completion."

Allkem and Livent are targeting a closing date of 4 January for their merger.

What's left now is the Allkem and Livent shareholders' votes and an Australian court's approval of the scheme.

The Scheme Booklet is being sent to shareholders today.

The Allkem shareholders' vote will take place on 19 December.

Allkem released a presentation on the benefits of the merger at the UBS Conference on Monday.

As we recently reported, Bell Potter thinks Arcadium Lithium will become a top-three global lithium producer. The broker has a buy rating on Allkem with a share price target of $18.45.

The post Allkem share price soars 8% on FIRB approval for Livent merger appeared first on The Motley Fool Australia.

At the time of writing, the lithium miner's shares are up 2.5% to $9.51.

Why are Allkem shares pushing higher?

Investors have been buying the company's shares today after its proposed merger with Livent Corp (NYSE: LTHM) took a big step forward.

Yesterday afternoon, the company revealed that the Federal Court of Australia has approved the convening of a scheme meeting and the dispatch of the scheme booklet.

Allkem has since followed this up with an announcement this morning advising that the Australian Securities and Investments Commission (ASIC) has registered the notice of meeting and explanatory statement in relation to the proposed scheme of arrangement.

The release also reveals that the independent expert's report, which has been prepared by Kroll Australia, concludes that the scheme is in the best interests of Allkem shareholders. This is in the absence of a superior proposal.

Furthermore, Allkem's directors continue to unanimously recommend that shareholders vote in favour of the scheme. Once again, this is subject to no superior proposal and the independent expert continuing to conclude that it is in the best interest of shareholders.

What's next?

The scheme meeting will be held in Western Australia next month on 19 December.

If everything goes to plan, the scheme will then before effective on 21 December. After which, it will be implemented on 4 January.

Once everything is complete, shareholders will receive shares in the merged entity, which will be known as Arcadium Lithium.

As covered here, Bell Potter estimates that Arcadium Lithium will be a top-three global lithium producer following the completion of the merger. It has a buy rating and a $18.45 price target on its shares.

The post Own Allkem shares? Here's the latest on its merger with Livent Corp appeared first on The Motley Fool Australia.

In afternoon trade, the lithium miner's shares are down 5% to $10.56.

This latest decline means that its shares are down approximately 36% over the last three months.

Why is the Allkem share price falling today?

Investors have been selling Allkem and other ASX lithium shares today following another poor night of trade for their peers on Wall Street.

Albemarle Corporation (NYSE: ALB), Livent Corp (NYSE: LTHM), and Sociedad Quimica y Minr de Chile SA (NYSE: SQM) all fell ~5% or more and hit 52-week lows during the session.

This has been driven partly by a bearish broker note out of Bank of America, which warned that the lithium market would be oversupplied in 2024 and 2025.

The market appears to believe that this will mean that lithium prices continue to fall and then remain at low levels for the coming years.

Though, regular readers shouldn't find this surprising. I've been warning that lithium prices could crash since the start of the year.

At that point, the lithium spodumene 6% spot price was US$5,990 per tonne and the lithium carbonate spot price was US$66,750 per tonne. At the end of last week, spot prices were US$2,230 and US$20,652 per tonne, respectively.

Is this a buying opportunity?

Goldman Sachs continues to believe that the Allkem share price is great value even though it expects lithium prices to keep falling.

Its analysts have a buy rating and a $15.20 price target, which implies a potential upside of approximately 44% for investors. The broker said:

Allkem has one of the best production outlooks in our lithium coverage, with broad-based growth optionality. This drives our forecast for the company's equity LCE production growth of ~4x over five years to FY28E, supporting earnings rebounding to near current record levels despite the declining lithium price environment.

The post Allkem share price sinks a further 5%: Is this a buying opportunity? appeared first on The Motley Fool Australia.

At the time of writing, the lithium miner's shares are up 2% to $11.54.

Why is the Allkem share price rising?

Investors have been buying the company's shares this morning after it released an update on its proposed merger with Livent Corp (NYSE: LTHM).

According to the release, the proposed merger is gathering pace and completion is becoming more and more likely.

This morning, Allkem revealed that Allkem Livent plc (New TopCo) has filed the necessary paperwork with the U.S. Securities and Exchange Commission (SEC). Furthermore, all competition and foreign investment approvals are expected to be received prior to the proposed closing of the transaction.

In light of this, subject to receipt of all necessary regulatory, shareholder, and Australian Court approvals, and the satisfaction or waiver of other closing conditions, Allkem and Livent are targeting completion of the transaction by the end of 2023.

Allkem expects to dispatch a notice of the meeting and an explanatory statement to shareholders in November. This booklet will contain information about the transaction, including the basis for the board's recommendation, as well as the independent expert's report.

Should you buy Allkem shares?

A number of brokers believe investors should be buying Allkem shares before the merger is completed.

In fact, Morgans has just upgraded the company's shares to an add rating with an improved price target of $15.30. Based on the current Allkem share price of almost 33% for investors over the next 12 months.

It is a similar story for analysts at Citi, which this week put a buy rating and $16.50 price target on its shares. This suggests an even greater upside of approximately 43% from current levels.

The post Allkem share price higher on Livent merger update appeared first on The Motley Fool Australia.

In afternoon trade, ASX lithium share is down almost 2% to $14.29.

While this is disappointing, one leading broker sees it as a buying opportunity for investors.

Why is Allkem an ASX lithium share to buy?

Bell Potter has been running the rule over Allkem following its latest update and continues to like what it sees.

That's despite its update coming in a little short of expectations on pricing. The broker explains:

AKE reported Q4 FY23 Mt Cattlin production of 58kt (BP est. 45kt) and Olaroz production of 5.1kt (BP est. 5.7kt). Mt Cattlin's recovery (up 49% qoq) was driven by favourable mineralisation as previously flagged. […] Product sales were materially below production across both assets. […] Realised prices were weaker than guided: Mt Cattlin concentrates at $4,297/t (guidance US$5,000/t, BP est US$4,645/t); and Olaroz third party sales at US$38,062/t (guidance US$42,000/t, BP est. US$38,500/t). Unlike previous quarterly releases, AKE did not provide quarter-ahead realised price guidance.

And while the above has led to the broker trimming its price target to $18.90 from $19.20, this still implies a potential upside of over 30% from current levels.

Bell Potter once again reiterated its buy rating on this ASX lithium share due to its production growth plans and strong demand for the batter-making ingredient. It concludes:

On a stand-alone basis AKE has a strong production and earnings growth profile into what we expect to be an exceptionally strong market for lithium. The AKE-Livent Corporation (NYSE: LTHM) merger will likely proceed; we are not confident that an interloper will emerge. A scheme booklet for the merger should be released early next quarter and include an independent expert report for a shareholder vote then completion by the end of 2023.

The post This ASX lithium share could rise 30%: analyst appeared first on The Motley Fool Australia.

The S&P/ASX 200 Index (ASX: XJO) lithium stock closed yesterday trading for $15.32 a share. In early afternoon trade on Friday, shares are changing hands for $15.18 apiece, down 1%.

That's a better performance than most of the other ASX 200 lithium stocks today. And it's roughly in line with the 0.9% loss posted by the benchmark index at this same time

With today's slide coming atop of a 3% fall yesterday, could Allkem shares now offer a potential 17% upside?

What's the outlook for this ASX 200 lithium share?

A growing number of analysts are becoming bullish on this ASX 200 lithium miner.

Among them, CLSA just raised its rating on the stock to 'accumulate'.

The asset manager has a $17.75 price target on Allkem shares. That's 17% above current levels.

Atop CLSA, Macquarie also has a positive outlook for the company, with a $17.40 price target forecast in June. And Bell Potter is even more bullish, coming out with a $19.20 price target for Allkem shares last month.

One of the potential tailwinds that could help drive the stock higher over the coming months is its proposed merger with Livent Corp (NYSE: LTHM).

In its quarterly activities report yesterday, the company said that during the period, "Allkem and Livent announced a definitive agreement to combine in an all-stock merger of equals to create a leading global integrated lithium chemicals producer."

On completion, Allkem shareholders will own approximately 56% and Livent shareholders will own approximately 44% of the merged lithium company. Allkem hopes to complete the merger by the end of 2023.

Allkem's balance sheet also looks strong. Allkem reported quarterly revenue of around US$334 million. The lithium company had net cash of US$648 million at 30 June. That's up US$71 million from 31 March.

How have Allkem shares been performing?

Allkem shares have delivered some outsized gains over the past 12 months, up 37%.

The post Could Allkem shares have another 17% up their sleeves? appeared first on The Motley Fool Australia.

Lithium explorers that finished in the red included:

• Pilbara Minerals Ltd (ASX: PLS) down 1.59%
• Allkem Ltd (ASX: AKE) down 3.64%
• Core Lithium Ltd (ASX: CXO) down 0.95%
• Mineral Resources Ltd (ASX: MIN) down 3.57%

In contrast, the S&P/ASX 200 Index (ASX: XJO) climbed 0.27% today.

Why did lithium shares have a tough run?

ASX 200 lithium shares appeared to fall after their counterparts in the United States dropped overnight.

Livent Corp (NYSE: LTHM) shares fell 2.12% on the New York Stock Exchange, while the share price of Sociedad Quimica y Minera de Chile (NYSE: SQM) slipped 4%. Albermarle Corporation (NYSE: ALB) shares tumbled 4.13%.

News emerged that Chinese mining company Tibet Summit Resources plans to invest $1.7 billion developing two lithium projects in Argentina.

The two projects in the Salta province could produce 50,000 to 100,000 tonnes of lithium, Reuters reported.

Commenting on the news, Argentina's economy minister Sergio Massa said:

We want a mining industry that takes advantage of our resources and generates added value and employment.

Allkem and Livent are among lithium shares on the market also developing lithium projects in Argentina.

Meanwhile, global research group Wood Mackenzie has released an opinion piece predicting lithium prices to slide over the next decade.

Commenting on this outlook, Wood Mackenzie principal lithium analyst Allan Pederson said:

Going forward, we expect prices to enter a period of controlled decline, settling back to around US$20,000 per tonne by the end of the decade.

The lithium carbonate (99.5% battery grade) price is currently up 0.17% to US$42,344.82 on the Shanghai Metals Market.

Share price snapshot

Pilbara shares have soared nearly 89% in the last year, while Core Lithium shares have slipped 6%.

Allkem shares gained 23%, while Mineral Resources shares are 16% higher.

The post Why did ASX 200 lithium shares slide today? appeared first on The Motley Fool Australia.

This includes Liontown Resources Ltd (ASX: LTR) rejecting the advances of Albemarle Corp (NYSE: ALB) and Allkem Ltd (ASX: AKE) announcing plans to merge with Livent Corp (NYSE: LTHM).

Chances are, this won't be where M&A activity stops. But which ASX lithium shares could be next in line to receive an offer?

Which ASX lithium share will next receive a takeover approach?

While there has been a lot of talk of Core Lithium Ltd (ASX: CXO) being a potential target, this seems unlikely due to its valuation.

M&A activity is designed to unlock value, but Core Lithium's valuation is well and truly unlocked… and some more.

Last month, Goldman Sachs highlighted that Core Lithium shares trade at ~1.4x net asset value (NAV) compared to a peer average of ~1.1x NAV. That's despite "also having the lowest average operating FCF/t LCE."

Its shares have risen 8% since then, making the premium even greater and (probably) ruling out a takeover approach.

What else?

So, what else is left? Well, one ASX lithium share that appears to be in the M&A crosshairs right now is Delta Lithium Ltd (ASX: DLI).

The lithium developer, recently known as Red Dirt Metals, is rumoured to be attracting interest from Mineral Resources Ltd (ASX: MIN) and Gina Rinehart's Hancock Prospecting.

On Monday, Bell Potter commented:

Reportedly, DLI has been under accumulation by potential strategic investors, Hancock Prospecting Pty Ltd and Mineral Resources Limited (MIN, Buy, TP$95/sh).

DLI has several characteristics in common with other lithium developers that have been the subject of strategic investment. Mt Ida is a relatively near-term producer, given that it's situated on a granted mining lease, with a submitted mining proposal. Early Yinnetharra exploration results (and DLI commentary) point to the potential of the project to host a Tier1 Resource and operation. And DLI is, so-far, unencumbered by a significant shareholding by a strategic investor.

Watch this space!

Incidentally, Bell Potter has a speculative buy rating and $1.05 price target on the ASX lithium share.

The post Which ASX lithium shares could be next to appear on the takeover radar? appeared first on The Motley Fool Australia.

Here's why brokers are particularly positive on these top shares:

Allkem Ltd (ASX: AKE)

Bell Potter believes this ASX 200 lithium share is still great value despite recent gains following the announcement of a merger with Livent Corp (NYSE: LTHM). The broker has a buy rating with a $19.20 price target on its shares. The broker commented:

AKE is now in-play; we think it is likely the LTHM merger will proceed and are not confident that an interloper will emerge. On a stand-alone basis the company has a strong production and earnings growth profile into what we expect to be an exceptionally strong market for lithium. Combining with LTHM and the NYSE listing could see an earnings multiple uplift. AKE is trading at a slight discount to the implied deal value, which we expect will close if deal certainty improves.

BHP Group Ltd (ASX: BHP)

A note out of Goldman Sachs reveals that its analysts are bullish on this mining giant. The broker currently has a buy rating and $49.90 price target on the Big Australian's shares. Goldman named four reasons why it is positive on BHP. It said:

Our Buy thesis on BHP is based on: (1) Attractive valuation, but at a premium to S32 & RIO (2) GS bullish iron ore, copper and met coal, (3) Optionality with +US$20bn copper pipeline and improved production growth, (4) Robust FCF, but still below RIO & S32.

CSL Limited (ASX: CSL)

Morgans is a fan of this ASX 200 biotherapeutics share and has an add rating and $337.92 price target on it. The broker believes CSL is well-placed for growth now its headwinds have faded. It said:

A key portfolio holding and key sector pick, we believe CSL is poised to break-out this year, a COVID exit trade, offering double-digit recovery in earnings growth as plasma collections increase, new products get approved and influenza vaccine uptake increases around ongoing concerns about respiratory viruses, with shares offering good value trading around its long-term forward multiple of ~30x.

Goodman Group (ASX: GMG)

Citi is a fan of this integrated industrial property company and has a buy rating and $24.30 price target on its shares. The broker believes Goodman is well-positioned to deliver solid earnings growth for the foreseeable future. It said:

We see potential for GMG to generate consistent high-single to low-double digit earnings growth over the medium term driven by rental upside and longer term development projects, which will add to management and development earnings. The stock currently trades at c. 19x FY24e, below global industrial peers, despite having higher earnings growth and lower leverage. We therefore see upside to the share price and retain Buy.

ResMed Inc. (ASX: RMD)

Another ASX 200 share that has been named as a buy is ResMed. Goldman Sachs is a fan of the sleep treatment solutions company and has a buy rating and $39.60 price target on its shares. It commented:

We continue to see a long-duration runway of HSD organic growth for RMD, and we believe valuations (PE: 31.4x / EV/EBITDA: 22.0x) both c.6% below 5-year averages and growth-adjusted valuation of 2.6x (sector 2.4x) are not demanding in the context of various near/long-dated tailwinds.

The post 5 ASX 200 shares to buy according to brokers appeared first on The Motley Fool Australia.

Since this time in April, the lithium miner's shares have hurtled 28% higher to close yesterday's session at $14.79.

This has been driven largely by news that the company plans to merge with fellow lithium giant Livent Corp (NYSE: LTHM).

Where next for Allkem shares?

The good news is that one leading broker believes there are more gains to come for investors. That's despite its analysts suggesting that Allkem shareholders might not be getting the better end of the deal.

According to a note out of Bell Potter, its analysts have retained their buy rating with a $19.20 price target. This implies potential upside of 30% for Allkem shares over the next 12 months from current levels.

What did the broker say?

As I mentioned above, the broker feels that Livent shareholders are the big winners from the merger agreement. It said:

Longer term, we don't believe AKE shareholder's ownership of NewCo (56%) reflects the company's stronger earnings profile and dominant upstream position. While we don't see it as a bad deal for AKE, it looks like a great deal for LTHM through strengthening its upstream capabilities, retaining key executive positions and receiving what we view as a disproportionately large share of NewCo.

Nevertheless, Bell Potter remains positive enough to maintain its buy rating. Particularly given how the US listing is likely to result in a valuation re-rating. It concludes:

AKE is now in-play; we think it is likely the LTHM merger will proceed and are not confident that an interloper will emerge. On a stand-alone basis the company has a strong production and earnings growth profile into what we expect to be an exceptionally strong market for lithium. Combining with LTHM and the NYSE listing could see an earnings multiple uplift. AKE is trading at a slight discount to the implied deal value, which we expect will close if deal certainty improves.

The post Own Allkem shares? Are you getting a good deal or is Livent the big winner from the merger? appeared first on The Motley Fool Australia.

The merged company, given the tentative name of 'NewCo', would emerge as a US$10.6 billion global lithium giant if the union was to go ahead.

Investors have reacted euphorically to this news. Since last Thursday, the Allkem share price has risen by a hefty 15.10%, even after factoring in yesterday's 1.85% drop at the close.

Over in the United States, Livent investors have also responded with excitement. Since the news became public, Livent stock has risen by a solid 5.3%.

If the merger does go through, it would result in Allkem investors receiving one share in 'NewCo' for every Allkem share owned. Livent investors would receive 2.406 NewCo shares for every Livent share owned.

After the merger is complete, Allkem investors would own 56% of the merged company, with Livent investors owning the other 44%.

NewCo would then be primarily listed on the New York Stock Exchange (NYSE). Conversely, ASX investors would own their new shares through a new CHESS Depositary Interest (CDI) arrangement. This would be similar to what happened to Afterpay investors when that company was acquired by Block Inc (ASX: SQ2). 

So is it time for Allkem investors to cash out? Or is the 'NewCo' evolution of Livent/Allkem worth sticking to?

What does the future hold for Allkem shares?

Well, let's start with some numbers. According to Allkem, the combined company would have made US$1.9 billion in revenue in the 2022 calendar year. It also would have produced an estimated US$1.2 billion of adjusted earnings before interest, tax, depreciation and amortisation (EBITDA).

The companies also anticipate that merging the two businesses will result in US$125 million in annual synergies and US$200 million in one-off capital expenditure savings.

So does this make it a no-brainer for investors?

Well, one ASX expert is definitively in this camp. As we covered last week, ASX broker Goldman Sachs is cheering the merger on. It is anticipated that NewCo will be a global "top 3 lithium producer" with a strong balance sheet that it can use to support growth opportunities.

Here's some of what Goldman's analysts had to say:

The merger would also imply a stronger/more defensive balance sheet to fund the proposed and possible growth pipeline, where management noted the current execution pipeline will continue without taking pause as both businesses are already fully funded to execute respective projects.

So that's how one ASX expert rates Allkem's future as part of NewCo. But it's worth pointing out that the merger isn't a done deal yet, so be sure to watch this space.

The post Is a slice of Livent worth holding onto Allkem shares? appeared first on The Motley Fool Australia.

The news went down well with investors on both sides of the Pacific Ocean, sending their shares hurtling higher.

But what about brokers? How have they responded to the Allkem-Livent merger? Let's find out.

Allkem merger creates a 'top 3 lithium producer'

Analysts at Goldman Sachs have responded positively to the news. The broker highlights that it will create a "top 3 lithium producer" globally if the transaction completes.

In addition, its analysts highlight that the combination of the two lithium miners will result in a stronger balance sheet that supports their growth opportunities. It said:

The merger would also imply a stronger/more defensive balance sheet to fund the proposed and possible growth pipeline, where management noted the current execution pipeline will continue without taking pause as both businesses are already fully funded to execute respective projects.

Goldman also suggested that the M&A activity may not stop at the Allkem merger, which will be music to the ears of ASX lithium shareholders. It commented:

On lithium sector M&A more broadly, as we have highlighted, those in a position for strategic consolidation with South American lithium brine producers (other developers/emerging operators) may also have synergies in these types of lithium projects, while global miners/commodities business likely remain interested in lithium assets.

Goldman has retained its buy rating. However, it hasn't changed its price target, which still sits at $12.90.

Brine processing techniques could be key

Morgans is also very positive on the Allkem merger with Livent. As well as the potential synergies, it highlights that the latter's advanced brine processing techniques could help driver a stronger performance from Allkem's assets. It said:

It is possible that the accelerated take up of different brine processing techniques at AKE's projects, that are used by LTHM, could unlock the large potential of those resources much faster than we and the market have allowed.

However, due to the jump in the Allkem share price yesterday, the broker has downgraded its shares to a hold rating with a $14.40 price target. It commented:

We reduce our rating to HOLD given the extremely strong share price reaction. We think the deal makes sense for AKE but there is limited fundamental upside given today's rally.

Though, it concedes that there's potential for a third-party to come in with a counteroffer that starts a bidding war. Keep an eye out for that!

The post Here's what brokers are saying about the Allkem merger with Livent appeared first on The Motley Fool Australia.

Lithium shares rising include:

• Allkem Ltd (ASX: AKE) shares are soaring 15%
• Core Lithium Ltd (ASX: CXO) shares are gaining 3%
• Pilbara Minerals Ltd (ASX: PLS) shares are lifting 5%
• Sayona Mining Ltd (ASX: SYA) shares are leaping 4%
• Lake Resources N.L. (ASX: LKE) shares are surging 13%
• Piedmont Lithium Inc (ASX: PLL) shares are jumping 4%
• Global Lithium Resources Ltd (ASX: GL1) shares are rising 8%

Let's take a look at what's boosting ASX lithium shares today.

What's going on?

Lithium sentiment appears strong on the market today following news out of Allkem.

Allkem and Livent Corp (NYSE: LTHM) are planning to merge into a US$10.6 billion global lithium company known as "New Co".

This deal is due to be finalised by the end of the year, subject to approvals, and would see Allkem shareholders owning 56% of the company, compared to a 44% stake for Livent shareholders.

Allkem's portfolio of lithium assets includes the Olaroz project in Argentina and Mt Cattlin in Western Australia.

Livent Corp shares rocketed 5% in the United States overnight and a further 0.39% in after-hours trade on the New York Stock Exchange.

Headquarters are planned for North America and the company would list on the New York Stock Exchange. A foreign exempt listing via Chess Depository Interests would also be maintained on the ASX.

Commenting on the news, Allkem CEO Martín Pérez de Solay said:

We are bringing together two highly complementary businesses to create a leading global lithium chemicals company, building on Allkem's demonstrated track record of integration.

The vertically integrated NewCo will improve delivery of high-quality, value-added products to our diverse customer base and unlock material synergies. 

Lake Resources is among the ASX lithium shares storming higher today. Lake has four lithium brine projects in Argentina including the Olaroz and Kachi projects.

Meanwhile, the lithium price is also continuing to recover. Lithium carbonate (99.5% battery grade) has risen 6.65% on the Shanghai Metals Market to US$30,173.22.

Lithium hydroxide (56.5% battery grade) is also up 1.56% to US$28,219.56.

In the United States overnight, Sociedad Quimica y Minera de Chile (NYSE: SWM) shares jumped 1.29%, while Albermarle Corporation (NYSE: ALB) shares slipped 0.34%.

Share price snapshot

Allkem shares have risen 32% in the last year, while Lake shares have fallen 60%.

Pilbara Minerals has exploded 82% in the past year, while Core Lithium shares have slid 8% and Sayona Mining shares have lost 17%.

Piedmont Lithium shares have jumped 21% in the last year, while Global Lithium Resource shares have risen 2%.

The post ASX lithium shares rocket higher amid Allkem merger news appeared first on The Motley Fool Australia.