The IGO Ltd (ASX: IGO) share price has been a positive performer on Friday.
In afternoon trade, the battery materials producerâs shares are up almost 5% to $10.14.
Why is the IGO share price pushing higher?
Todayâs gain has been driven largely by a rebound in the resources sector.
Investors have been piling back into the sector amid reports that China is planning a massive US$220 billion stimulus program with a focus on infrastructure spending. This bodes well for demand for commodities and should be supportive of prices.
The buying has been so strong in the sector today that the S&P/ASX 200 Resources index is currently up 2.1%. This compares favourably to the ASX 200 index, which is up 0.5% at the time of writing.
Anything else?
In addition to the above, the battery materials industry has been in fine form today, with a number of lithium shares such as Allkem Ltd (ASX: AKE) and Pilbara Minerals Ltd (ASX: PLS) rebounding strongly from recent weakness.
The Allkem share price is currently up over 5% and the Pilbara Minerals share price is up a sizeable 7.5%.
IGO has exposure to lithium through its joint venture with Tianqi Lithium Corporation. This includes stakes in the Greenbushes Lithium Mine and the Kwinana Lithium Hydroxide Refiner.
Can its shares keep rising?
According to a recent note out of Macquarie, its analysts see plenty of room for the companyâs shares to run higher.
Macquarie currently has an outperform and $17.00 price target on them. Based on the current IGO share price, this implies potential upside of almost 70% over the next 12 months.
The broker likes the company due to its exposure to critical minerals, which has been boosted since the completion of the Western Areas acquisition.
The post Here’s why the IGO share price is discovering a 5% rally on Friday appeared first on The Motley Fool Australia.
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More reading
- Is now the time to be buying beaten down ASX 200 mining shares?
- Down 21% last month, is now the time to buy IGO shares?
- Top brokers name 3 ASX shares to buy next week
- Brokers name 3 ASX shares to buy today
- Leading brokers name 3 ASX shares to buy today
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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