I knew all along these fine fellows would eventually come around to, “MY” way of thinkun, Blah, blah, blah………………
Top Broker tips Orocobre (ASX:ORE) share price to rise 21%
The Orocobre Limited (ASX: ORE) share price has been on fire in 2021.
Since the start of the year, the lithium miner’s shares have risen a sizeable 91%.
This is a whopping 10 times greater than the 9% return generated by the S&P/ASX 200 Index (ASX: XJO) over the same period.
Why is the Orocobre share price smashing the market?
Investors have been bidding the Orocobre share price higher this year thanks to bullish sentiment in the lithium sector.
This is being underpinned by rising prices and the very favourable outlook for the battery making ingredient due to electric vehicle and renewable energy adoption.
In addition to this, Orocobre recently completed its merger with Galaxy Resources.
This has created a top five lithium mining company, soon to be rebranded as Allkem, with strong operations and equally strong growth prospects.
Is it too late to invest?
The good news is that one leading broker still sees plenty of upside for the Orocobre share price.
According to a note out of Citi this week, its analysts have retained their buy rating and lifted their price target on the company’s shares to $10.50.
Based on the current Orocobre share price of $8.66, this implies potential upside of 21% over the next 12 months.
What did the broker say?
Citi is a fan of the Orocobre-Galaxy merger. It believes the merged company is well-placed to benefit from strong lithium prices.
The broker commented: “The ORE-Galaxy Resources Ltd (GXY) merger has formed one of the largest ASX-listed lithium pure-play companies and among the top five global lithium producers; we forecast pro-forma FY22 lithium carbonate equivalent sales of around 37kt.
The company is diversified geographically and by production method, with hard rock and brine assets.”
“ORE’s joint venture with Toyota Tsusho Corporation (TTC, now a 6.2% ORE shareholder) has supported the development of its flagship asset (Olaroz, Argentina) and the company’s first investment in downstream battery grade lithium hydroxide production (Naraha, Japan).
ORE is in a strong position to benefit from strong lithium demand as a result of the global decarbonisation movement,” it concluded.
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