Lithium demand is about to skyrocket, opening opportunities for some of the most undervalued lithium stocks available.
First, according to Statista, global demand is set to soar, noting it could reach 3.8 million tons by 2035. That’s a sizable jump from just over a million tons this year as the world attempts to go green.
Second, the International Energy Agency says that based on current electric vehicles and battery storage, lithium demand could soar 13 times over by 2040. Prices are set to follow.
According to Canaccord Genuity, lithium prices are “poised to rebound by July.” In fact, “Canaccord says it’s more confident in its current view that lithium has bottomed than it was last May due to production prices for lithium carbonate equivalent recently falling across several producers,” they added, according to NorthernMiner.com.
Plus, as noted in Lithium Royalty’s (OTCMKTS:LITRF) latest earnings report, “lithium prices appeared to reach a bottom during the quarter with prices firming up in March. Current market prices for spodumene are trading approximately 25% higher than the lows seen in January and February this year as demand signals continue to firm up led by growth from China.”
It’s just another reason to start jumping into some of the most undervalued lithium stocks.
Albemarle (ALB)
Weakness in Albemarle (NYSE:ALB) is an opportunity. After failing at double top resistance dating back to February, the lithium giant has since slipped to $118. From here, I’d like to see it retest $137.50.
As we wait for ALB’s rise, we can collect its 40 cents per share dividend, payable July 1 to shareholders of record as of June 14. In addition, analysts at Deutsche Bank just raised their price target on ALB to $140 with a hold rating. RBC Capital also raised its target to $157, with an outperform rating thanks to strong earnings.
In its first quarter, the company posted adjusted earnings per share of 26 cents on sales of $1.4 billion. The market was only looking for 25 cents on $1.3 billion in sales. A year-over-year decline is normal when lithium prices plummet. Give ALB time to work out.
American Lithium (AMLI)
Another one of the most undervalued lithium stocks to buy is American Lithium (NASDAQ:AMLI). Most recently, it dropped from about 85 cents to 67 cents, where it appears to have caught strong support. From here, I’d like to see it initially retest 85 cents, and potentially run back to $1.
Helping, analysts at National Bank just initiated coverage of AMLI with an outperform rating with a $1.50 price target.
We also have to remember that AMLI tripled the estimated value of its Falchani lithium projects in Peru. “The company said Falchani’s estimated value has tripled from the previous forecast to $5.11B and that the project would have a potential operating life of 32 years,” as noted by Seeking Alpha.
In addition, as noted by AMLI CEO Simon Clarke, “Going forward, with lithium prices appearing to have bottomed and uranium prices having strengthened further, we feel we are uniquely placed to benefit from any sustained recovery and in the interim, we continue to prudently manage our working capital.”
Piedmont Lithium (PLL)
Piedmont Lithium (NASDAQ:PLL) appears to have bottomed out at around $12.63. From here, I’d like to see it retest $16 near term.
Remember, as I’ve noted, the biggest catalyst for Piedmont is North Carolina. As I said on May 2, “the company just secured its much-anticipated North Carolina mining permit.”
Also, according to Piedmont Lithium President and CEO Keith Phillips, “We plan to develop Carolina Lithium as one of the lowest-cost, most sustainable lithium hydroxide operations in the world, and as a critical part of the American electric vehicle supply chain.”
In addition, the company noted, “The mining permit is a catalyst for accelerating discussions with potential funding parties, including government loan agencies and strategic partners who could provide capital, offtake, and technical support. The Company expects, based on its published technical studies, Carolina Lithium to be a low-cost producer of spodumene concentrate and lithium hydroxide and a key contributor to U.S. energy security.”
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
