In this article, we will discuss the 10 Best Nickel Stocks to Invest in According to Analysts.
Investing News Network highlighted that Nickel witnessed strong price momentum in H1 of the year as the prices took support from investor sentiment and speculation throughout commodity markets which saw a surge in prices for precious and base metals. Nickel prices remained volatile during Q3 2024 due to market speculation, Chinese stimulus, and oversupply.
Among the contributing factors was the supply of laterite nickel out of Indonesia, which led to mine curtailments in New Caledonia, Australia, and Europe. Furthermore, the increased demand for battery production in China is yet to reach the levels required to make up for the increased supply. Despite the EV sector in China showing a YoY increase of 32% during the first 9 months of 2024, the industry’s nickel demand was not able to make up for shortcomings in the broader economy.
Oversupply of Nickel
Nickel remains a critical component in NMC (nickel-manganese-cobalt) batteries, which are used in EVs. For the last few quarters, the market saw a significant oversupply of nickel from Asian markets, mainly from Indonesia. As per S&P Global, mined nickel production from the country saw an increase of 99,000 metric tons during Q3 2024 and is expected to be in the 2.4 million metric ton range by 2024-end, making up 57% of total global production. Despite growing demand for batteries, the oversupply situation has not been under control. This is mainly because of a weak Chinese economy.
China has been tagged as the largest consumer of nickel in the world as a majority of the metal is being used in stainless steel production. However, a difficult real estate sector and broad economic deflation impacted the demand. Investing News Network went on to say that Nickel found pricing support in September, with the Chinese government rolling out stimulus measures focused on fueling economic growth. The measures also included a 0.5% cut to the mortgages and a reduction in the downpayment to buy a home to 15% from 25%. Even though there was an initial surge in nickel prices after the package, the prices retreated once again.
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What Can Drive Nickel Prices?
Despite the challenging market conditions, Nickel’s long-term demand in the EV industry is robust. According to EV Magazine, as automakers prioritize the high-nickel battery chemistries because of range and performance advantages, nickel consumption should be fueled as a result of the global shift toward electrification.
As per Benchmark estimates, the battery nickel demand is expected to triple by the year 2030. Mid and high-level performance EVs are expected to fuel the growth of battery nickel demand in the coming years, mainly in Western markets. Benchmark projections demonstrate that nickel-based chemistries will capture 85% of battery cell production capacity outside of China by the year 2030. The batteries should make up for more than 50% of nickel demand growth by 2030, touching 1.5 million tonnes of nickel demand by the decade’s end.
Amidst these trends, let us now have a look at the 10 Best Nickel Stocks to Invest in According to Analysts.
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Our Methodology
We used a screener and sifted through several online rankings to extract the nickel stocks. Finally, the list of stocks was arranged in the ascending order of their upside potential, as of November 15.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Nickel Stocks to Invest in According to Analysts
10) Carpenter Technology Corporation (NYSE:CRS)
Average Upside Potential: 7%
Carpenter Technology Corporation (NYSE:CRS) is a leading producer and distributor of specialty metals, which includes nickel alloys, titanium alloys, and superalloys.
Wall Street analysts believe that the aerospace and defense sectors continue to form the cornerstone of Carpenter Technology Corporation (NYSE:CRS)’s market demand. Passenger demand and geopolitical factors drove strong growth in these industries. Original Equipment Manufacturers (OEMs) including Boeing, RTX, GE, and Airbus saw challenges in ramping up production, resulting in opportunities for agile suppliers such as Carpenter Technology Corporation (NYSE:CRS).
As per the analysts, the company was able to exploit this situation by flexibly allocating its products among OEMs, aftermarket customers, and defense contractors. Therefore, Carpenter Technology Corporation (NYSE:CRS) was able to navigate supply chain disruptions effectively and sustain its strong market position.
Moving forward, Carpenter Technology Corporation (NYSE:CRS)’s earnings momentum is expected to be aided by improved productivity, product mix optimization, and pricing power. Considering the solid execution, healthy market position, and unique manufacturing capabilities, the company expects operating income to be at the high end of the $460 million to $500 million range for the full fiscal year. The company expects its long-term aerospace demand to remain strong, with 2026 potentially exceeding 2025 performance.
Deutsche Bank analyst Scott Deuschle gave a “Buy” rating on the shares of Carpenter Technology Corporation (NYSE:CRS), increasing the price target to $215 from $205 in September 2024. Invesco Distributors, Inc., an investment management firm, released its Q2 2024 investor letter. Here is what the fund said:
“Carpenter Technology Corporation (NYSE:CRS) manufactures, fabricates and distributes stainless steels, titanium and specialty metal alloys. Management accelerated its guidance for long-term fiscal 2027 EPS (earnings per share) by a full year. Management also reported quarterly earnings that beat analysts’ expectations and raised guidance for fiscal year 2024.”
9) Leggett & Platt, Incorporated (NYSE:LEG)
Average Upside Potential: 9.9%
Leggett & Platt, Incorporated (NYSE:LEG) is a diversified manufacturer, producing a variety of products, including items for homes, offices, and automobiles. Among the most important raw materials that the company uses include chemicals used in foam production, titanium, and nickel-based alloys, and other high-strength metals, among others.
Wall Street analysts believe that Leggett & Platt, Incorporated (NYSE:LEG)’s focus on cost reduction and restructuring plan should drive improvement in its bottom line. The company is focused on simplifying its portfolio to businesses that represent long-term value. As a part of this review, Leggett & Platt, Incorporated (NYSE:LEG) continues to explore the potential sale of its Aerospace business.
The company expects that actions focused on strengthening the balance sheet, improving operating efficiency and margins, and positioning for future growth opportunities should result in long-term shareholder value. Leggett & Platt, Incorporated (NYSE:LEG)’s restructuring plan remains on track to achieve annual cost savings in the range of $50 million – $60 million by late 2025.
Analysts at Piper Sandler raised the shares of Leggett & Platt, Incorporated (NYSE:LEG) from an “Underweight” rating to a “Neutral” rating, increasing the target price from $11.00 to $13.00 on 30th October.
8) Sibanye Stillwater Limited (NYSE:SBSW)
Average Upside Potential: 12.6%
Sibanye Stillwater Limited (NYSE:SBSW) operates as a precious metals mining company. It produces gold platinum group metals (PGMs), including palladium, platinum, rhodium, iridium, ruthenium, chrome, nickel, silver, cobalt, and copper.
Sibanye Stillwater Limited (NYSE:SBSW)’s entry into the battery metals sector and diversified portfolio are expected to act as critical tailwinds. The company continues to invest in future growth. The Keliber project, which is a lithium venture in Finland, demonstrates a significant opportunity to diversify into the battery metals market. In the current economic climate, the company has been taking a measured approach to project development. This entry places Sibanye Stillwater Limited (NYSE:SBSW) well to potentially benefit from the elevated demand for EV components.
The company’s diversified portfolio, which spans PGMs, gold, and battery metals, has placed it favorably to potentially benefit from different commodity cycles. This diversification strategy might offer a hedge against volatility in any single market, resulting in more stable overall performance.
Sibanye Stillwater Limited (NYSE:SBSW)’s presence in precious metals and battery materials is in tandem with long-term trends in traditional investment demand and a pivot to green energy. As the EV market grows, the company’s investments in battery metals should yield significant returns. Simultaneously, Sibanye Stillwater Limited (NYSE:SBSW)’s established position in PGMs and gold offers exposure to metals with industrial applications and investment appeal during an economic slowdown.
As per Wall Street analysts, the shares of Sibanye Stillwater Limited (NYSE:SBSW) have an average price target of $4.40.
