Down 21% last month, is now the time to buy IGO shares?

The IGO Ltd (ASX: IGO) share price has plunged in the past month, but could it be in for better days?

IGO shares fell 21% in the month of June. In today’s trade, the company’s share price is rising 0.6% to the current share price of $10.02. For comparison, the S&P/ASX 200 Index (ASX: XJO) is jumping 0.24% today.

Let’s take a look at the outlook for the IGO share price.

Could the IGO share price go higher?

IGO is exploring for battery metals for a clean energy future including nickel, copper and cobalt. The company also has 49% interest in a global joint venture (JV) with the Tianqi Lithium Corporation. The JV has a 51% stake in the Greenbushes lithium mine. In the March quarter, IGO reported a $60.5 million share of net profit from the lithium joint venture.

Multiple brokers have recently recommended IGO shares, with a huge upside on the company’s price target.

Macquarie analysts have kept an outperform rating on the company’s shares with a $17 price target. This is nearly 70% more than the IGO share price at the time of writing. The broker is optimistic on IGO due to its “world class lithium business”.

Macquarie can see this lithium focus propping up the company’s earnings in future years. As my Foolish colleague James reported, Macquarie also noted IGO shares trade at a discount to its ASX lithium peers.

Meanwhile, UBS analysts have recently maintained a buy rating on the IGO share price. The broker has lifted its price target on the company’s shares to $12.25. This is 22% more than the current share price. UBS lifted earnings estimates on IGO due to better than expected lithium prices.

JP Morgan also retained an overweight rating on the IGO share price following the company’s earnings. Analysts said, “we continue to like the stock from an investment point of view”.

In the March quarter, IGO reported an underlying EBITDA of $232.6 million, up 89% from the previous quarter.

In late June, IGO entered a binding transaction with Venus Metals Corporation that would allow IGO to acquire up to 70% interest in the Bridgetown Greenbushes exploration project. This would involve spending $6 million on exploration at the project.

IGO share price snapshot

The IGO share price has soared 25% in the last 12 months, but it has shed nearly 13% in the year to date.

In comparison, the benchmark ASX 200 has lost nearly 9% over the past year.

IGO has a market capitalisation of nearly $7.6 billion based on today’s share price.

The post Down 21% last month, is now the time to buy IGO shares? appeared first on The Motley Fool Australia.

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More reading

• 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
• 3 ASX lithium stocks this fund manager is holding despite sector pullback
• Why is the IGO share price slipping on Thursday?

Motley Fool contributor Monica O’Shea 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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