In this piece, we are going to discuss 12 Cheap Lithium Stocks to Buy According to Analysts. If you wish to see the top 5 stocks in this selection, check out 5 Cheap Lithium Stocks to Buy According to Analysts.
Lately, there is a growing buzz in lithium market, which has witnessed a substantial surge to over $8.8 billion in 2023, and is forecasted to hit $28.45 billion by 2033, according to Precedence Research. This surge is driven from lithium’s key role in batteries, solar panels, and chemicals, which are demanded a lot globally.
This shiny metal’s demand is looking to skyrocket from 292,000 metric tons in 2020 to a whopping 2.5 million metric tons by 2030, driven by the demand of lithium in batteries for the electronics and automotive industries. Asia-Pacific, with global market leaders like China, South Korea, and Japan, is the main stage for lithium consumption. China is climbing up the hill, with its eye on a massive lithium production capacity of 1,811 GWh by 2025, driven by a big boom in electric vehicle and lithium-ion battery markets.
And it doesn’t stop there. The global electric vehicle market is on the rise, set to reach $1,579.1 billion by 2030! You can imagine as much as 30% to 45% of all new car sales to be of electric cars, consisting of lithium-ion batteries and electric motors.
Moreover, batteries for electric vehicles and energy storage are in-demand as well, with estimates indicating a whopping demand of 950 gigawatt-hours in 2023, according to BloobbergNEF. However, while the demand is on the rise, suppliers are unable to hit their supply targets, impacting battery prices.
Predictions of BloombergNEF are predicting a cool-off in battery metals’ prices in 2024, which are expected to be falling eventually to $133/kWh by 2024 end and further beyond. However, much lower battery pack prices are forecasted to occur, thanks to technological advancements and enhanced manufacturing processes.
In specific, lithium industry took a hit recently which impacted lithium stocks too; however, it’s said that best moves sometimes are those that market is making. While being a contrarian investor could be risky, it also has a massive upside to offer. Thus, the future outlook for the market looks promising. The lithium industry is forecasted to keep growing until 2031 by almost 14.8% and by 12.5% until 2033, which narrows the chances of getting into a trap through the contrarian approach.
With this, let’s now look at the 12 Cheap Lithium Stocks to Buy According to Analysts.
A person inspecting a lithium-ion battery that is being recycled.
Methodology
This list of 12 Cheap Lithium Stocks to Buy According to Analysts has been put together by us, by focusing on companies engaged in lithium mining, battery sales, and tech pertaining to batteries. We filtered out the ones with best upside potential of stock based on the average analyst price target, and ones that had their P/E ratio under 15. Furthermore, we peeked into Insider Monkey’s Q3 2023 database for an in-depth look into the real performers of the market. This data pertained to 900 hedge funds in the last quarter of 2023 which gave us the indication of what the biggest investors were talking about. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
12. Cosmo Advanced Materials & Technology Co., Ltd. (KSE:005070.KS)
Average Price Target Based on Analyst Ratings: 148.96
Upside Potential as of 21 March: 17.18%
P/E Ratio: -3,664.3
Cosmo Advanced Materials & Technology Co., Ltd. (KSE:005070.KS) is rising in the lithium game. They manufacture battery materials for EVs and energy storage globally. Although, the stock is on a dip recently, it rose 299.61% in the first half of 2023 and is looking towards big profits in the coming years; operating profit is expected to reach $59.2 million in 2024 and $136.5 million in 2025, from $26.2 million in 2023. Moreover, Cosmo Advanced Materials & Technology Co., Ltd. (KSE:005070.KS) are looking at an expansion of production capacity to whopping 100,000 tons by 2026, making it one to keep an eye on in the future.
11. EnerSys (NYSE:ENS)
Average Price Target Based on Analyst Ratings: 108.3
Upside Potential as of 21 March: 17.59%
P/E Ratio: 14.10
EnerSys (NYSE:ENS) have set themselves up for providing energy solutions for industries by producing various kinds of batteries, chargers, power equipment, and even outdoor enclosures. During the last quarter of 2023, 30 hedge funds climbed on board with EnerSys (NYSE:ENS) clenching on to a $409.4 million stake in the company – that’s a rise of 6 hedge fund positions in the stock, as compared to the previous quarter. Cliff Asness’ AQR Capital Management has the majority stake with a cool $82.5 million value, encompassing 817,406 shares.
10. Albemarle Corporation (NYSE:ALB)
Average Price Target Based on Analyst Ratings: 147.32
Upside Potential as of 21 March: 18.38%
P/E Ratio: 9.84
To steal a real deal in the deal market, we present to you Albemarle Corporation (NYSE:ALB), sitting at 12th place on our list of 12 Cheap Lithium Stocks to Buy According to Analysts. This company engages in the specialty chemicals game. Its stock took a dip with a 30% loss of its value in the past six months, because of sluggish lithium prices. However, there’s a silver lining to look at here.
This dip made possible a valuable opportunity. Albemarle Corporation (NYSE:ALB) is opening up a lithium conversion spot in Meishan, China, producing a cool 50,000 tons of lithium hydroxide each year, which will bolster their market share in China’s electric vehicle market by 2025.
Furthermore, their sales are expected to skyrocket at 21.3% next year, while their EPS sits nicely at $22.25 in the current year. Also, the stock has got some serious investors’ attention as Vanguard Group and Black Rock Inc. have stake in the stock worth 14.1 million & 10.2 million number of shares, and $2.0 & $1.5 billion value shares, respectively.
9. Tianqi Lithium Corporation (SHENZEN:002466.SZ)
Average Price Target Based on Analyst Ratings: 8.72
Upside Potential as of 21 March: 21.28%
P/E Ratio: 10.78
Placed 9th on our list of 12 Cheap Lithium Stocks to Buy According to Analysts is Tianqi Lithium Corporation (SHENZEN:002466.SZ), which is all about developing and selling lithium products like carbonate, chloride, hydroxide, and what not. Analysts at the Wall Street are all into this stock, especially praising how they are managing their interest expenses and their robust EBIT growth. Moreover, according to these analysts, their debt game is also going strong, with all risks under control.
Moreover, Tianqi Lithium Corporation (SHENZEN:002466.SZ) is merging things up with Chilean government to delve into the realm of lithium resources down there. They aim to enhance lithium extraction there using the cutting-edge eco-friendly tech.
The future outlook is looking quite promising for the industry in general, despite the current year outlook not being very bright and sunny. Analysts are predicting a robust 5-year growth of 56.56%, while recommendations giving a “buy” signal.
8. Ganfeng Lithium Group Co., Ltd. (HKSE:1772.HK)
Average Price Target Based on Analyst Ratings: 4.76
Upside Potential as of 21 March: 41.67%
P/E Ratio: 14.78
10th on our list of 12 Cheap Lithium Stocks to Buy According to Analysts is Ganfeng Lithium Group Co., Ltd. (HKSE:1772.HK). They are involved in making lithium and batteries in China and markets beyond; a big move was made by them recently in the industry by clenching onto Lithium America’s Pastos Grandes project in Argentina.
In addition to this, Ganfeng Lithium Group Co., Ltd. (HKSE:1772.HK) has now a 15% stake in Proyecto Pastos Grandes S.A. with the help of a cool deal that involved $70 million in exchange of new shares. Furthermore, the company’s P/E ratio is sitting at 3.97, down from 6.83 at 2022-year end. The analysts are giving away bullish stance as well, giving the stock a 2.7 rating of “buy.”
7. Sociedad Química y Minera de Chile S.A. (NYSE:SQM)
Average Price Target Based on Analyst Ratings: 72.09
Upside Potential as of 21 March: 42.72%
P/E Ratio: 6.98
Placed 9th on our list of 12 Cheap Lithium Stocks to Buy According to Analysts is Sociedad Química y Minera de Chile S.A. (NYSE:SQM). In their full year 2023 financial results, its net income was seen soaring past $2 billion, and EPS was seen sitting at $7. The company raked in revenue of $5 billion; although it saw a dip with respect to last year, they were recorded as selling 170,000 metric tons, which is 10% more than the last year. Furthermore, in the last quarter of 2023, their sales hit over 51,000 metric tons, which is a quarterly record for them.
In future sense, the company is expecting a 5% to 10% growth in their lithium sales volume in 2024, while the lithium demand is expected to soar by 20%, more so in China, where battery materials and lithium products are expecting a rising demand.
Moreover, as of the Q4 2023, the stock is seen to be in grasp of 17 hedge funds, with the total investment value being $139.8 million. Ken Griffin’s Citadel Investment group is leading the chart in this respect, with owning about 0.5 million shares worth $30.4 million. As a cherry on top, the stock is boasting a “buy” recommendation on Yahoo Finance.
6. FREYR Battery, Inc. (NYSE:FREY)
Average Price Target Based on Analyst Ratings: 2.5
Upside Potential as of 21 March: 61.29%
P/E Ratio: -3.26
FREYR Battery, Inc. (NYSE:FREY) is a company whose activity revolves around manufacturing batteries for electric vehicles, energy storage, and marine applications. 11 hedge funds are holding stakes in the stock, value of which sits at $35.7 million, allowing the stock to grab a place in our list of 12 Cheap Lithium Stocks to Buy According to Analysts.
In the last quarter of 2023, FREYR Battery, Inc. (NYSE:FREY) up their earning game, surpassing expectations with an EPS of %-0.17 where the analysts were putting it at $-0.27. Moreover, they ended the year with a cool $276 million in cash, with the help of some restructuring back in December 2023, involving a one-time charge of $6 million in relevance to severance costs.
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Disclosure: None. 12 Cheap Lithium Stocks to Buy According to Analysts is originally published on Insider Monkey.
