The Lake Resources N.L. (ASX: LKE) share price surged by more than 9% today, taking its gains for this week to 20%.
The Lake Resources share price closed at $1.55, up 9.54% on the day. That means it has now soared 68.2% since it opened at 92 cents on March 1.
These levels also mark the company’s 52-week high, surpassing previous highs of $1.29 on 11 March and $1.09 on 4 November 2021.
What are brokers saying?
Analysts at Bell Potter are constructive on the Lake Resources share price and gave it the vote of approval in a recent note. The firm made note of the ESG benefits to be realised at Lake’s key asset, the Kachi Lithium Brine project in Argentina.
It said the project’s direction lithium extraction technology has “enormous ESG benefits compared with incumbent brine and hard rock lithium production methods”.
After its examination, the broker valued Lake Resources at $1.82 per share with a speculative buy.
Fellow broker Lodge Partners also rates the company a buy with a $1.77 per share valuation. At the time of its report in mid-February, Lodge’s price target had an implied return of 86% when Lodge was trading at just 95 cents apiece.
Both firms agree that lithium pricing is the biggest driver to the Lake Resources share price going forward. Lodge reckons agreements reaching US$20,000/t aren’t unrealistic at this stage.
“We have increased our valuation on LKE… In our previous valuation we used a lithium price of US$15,000/t, however we feel it would be suitable to increase our lithium price input considering recent activity in the spot price,” it said.
“In our view, there is a very real possibility LKE will sign off-take contracts at more than US$20,000/t, hence our upgraded lithium price is still conservative.”
In fact, Lodge mentioned its valuation is most sensitive to lithium spot price movements. Just how much it moves is incredibly important on the upside potential on offer, it reckons.
“The valuation is most sensitive to lithium spot price movements. Each US$1,000/t movement gives a +-20% variation to our valuation,” Lodge said, noting “a price range of US$16,000/t to US$20,000/t sees the valuation range from $1.25to $2.28”.
Bell Potter and Lodge are joined by five other firms who reckon Lake Resources is a buy right now – 100% of all analysts covering the stock, according to Bloomberg data.
The consensus price target is $1.79 from this list, offering an upside potential of around 15% on the current share price.
Lake Resources share price snapshot
In the last 12 months, the Lake Resources share price has climbed more than 352% and is up a mammoth 50% this year to date.
Just over the past month, shares have jumped another 68%. They have also gained 26% over the past week.
