The Allkem Ltd (ASX: AKE) share price was a very strong performer last week.
The lithium giantâs shares rallied an impressive 15% higher over the five days.
This means that the Allkem share price is now up almost 60% since this time last year.
Can the Allkem share price continue its ascent?
The good news is that a number of brokers still believe the companyâs shares can keep climbing from here.
For example, according to a note out of Morgans, its analysts have retained their add rating with a slightly trimmed price target of $15.40.
Based on the current Allkem share price, this implies potential upside of 11% for investors over the next 12 months.
What did the broker say?
Morgans was pleased with Allkemâs performance in FY 2022. It notes that the companyâs âFY22 net profit beat was in-line with our forecast (+1%) despite a miss at the EBITDAIX level.â
And while it acknowledges that the companyâs outlook was a bit of a mixed bag, with production downgraded at Mt Cattlin but stronger prices for Olaroz, it saw enough to remain bullish.
Looking ahead, the broker sees plenty of growth avenues and is forecasting strong cash flow generation again in FY 2023. Morgans concludes:
We still see value upside at todayâs closing price despite the recent rally. If AKE can provide more detail on its potential future expansion projects like Olaroz S3 and the potential downstream projects for James Bay then we think the market is likely to allow for further growth. We maintain our ADD rating with 12% [now 11%] upside to our target price. Despite the large increases in cash flow we donât expect AKE to commence paying a dividend in FY23 while its capital expenditure is elevated.
The post Morgans still sees ‘value upside’ upside in Allkem share price despite recent rally appeared first on The Motley Fool Australia.
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More reading
- Top brokers name 3 ASX shares to buy next week
- ASX 200 reporting season weekly wrap: Top risers and fallers
- Allkem share price higher following massive FY22 profit growth
- Allkem share price on watch amid a record year
- Earnings preview: Here are the ASX shares reporting today
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