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The Syrah Resources Ltd (ASX: SYR) share price has been a very strong performer on Thursday morning.

At the time of writing, the graphite producer’s shares are up 32% to a multi-year high of $1.75.

This latest gain means the Syrah share price is now up an impressive 78% in 2021.

Why is the Syrah share price shooting higher?

Investors have been bidding the Syrah share price higher this morning after it announced a major agreement relating to its vertically integrated Active Anode Material (AAM) production facility in Vidalia, USA.

Through this facility, Syrah is aiming to be the first major integrated ex-China producer of natural graphite AAM that is battery ready for electric vehicles.

Well, it made a major step forward to achieving this goal this morning. According to its announcement, the company has executed an offtake agreement with electric vehicle giant Tesla to supply natural graphite AAM from the production facility.

The release explains that Tesla will offtake the majority of the proposed initial expansion of AAM production capacity at Vidalia at a fixed price for an initial term of four years. This will commence from the achievement of a commercial production rate, subject to final qualification.

In addition, Tesla has an option to offtake additional volume from Vidalia subject to Syrah expanding its capacity beyond 10kt per annum of AAM.

Management believes that the agreement provides a compelling foundation to proceed with the initial expansion of Vidalia’s production capacity. Though, a final investment decision for construction of this expanded facility is planned in January 2022, subject to financing commitments.

But it doesn’t stop there. The company revealed that it is advancing commercial and technical engagement with other target customers to develop Vidalia AAM for mass production and secure additional long-term purchase commitments for Vidalia.

The post Syrah (ASX:SYR) share price rockets 32% higher on Tesla deal appeared first on The Motley Fool Australia.

More reading

• Why the Bega (ASX:BGA) share price is sinking 9% today
• Aussie investors now hold more Tesla than Woolworths (ASX:WOW)
• Woodside (ASX:WPL) just signed a key hydrogen export MOU. What does this mean for its shares?
• Douglass speaks out: ‘We’ve never sold a single share in Magellan’
• 2 excellent ASX growth shares offering big potential returns in 2022

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 Bruce Jackson.

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The Bega Cheese Ltd (ASX: BGA) share price is on the slide on Thursday morning.

At the time of writing, the diversified food company’s shares are down 9% to $5.10.

Why is the Bega share price sinking?

Investors have been selling down the Bega share price today after it provided the market with a trading update.

According to the release, demand for Bega’s products has remained strong during the pandemic.

Management notes that the company’s portfolio of quality brands, its Australian and international customer channels, and extensive product mix have been particularly important. It highlights that this positioned the company well to deal with the many changes and challenges associated with the impact of COVID-19.

These include disruption in Australian food service channels as a result of lockdowns, structural changes in the Chinese infant formula market, significant operational disruption including factory shutdowns, major changes to operations and logistics scheduling, increased safety and testing regimes, major cost increases, and shortages across the entire supply chain.

In respect to the latter, the company has been focused on managing the cumulative effect of the direct and indirect costs associated with COVID-19. It notes that some of the impacts will be offset by improved market returns and the cessation of a number of one-off costs. However the timing of both price increases and the removal of COVID-19 related costs will affect business performance in FY 2022.

In addition, the company warned that farm milk supply across the Australian dairy industry remains flat to declining. Combined with strong competition for supply, management expects upward pressure on pricing to continue.

Nevertheless, management is expecting to deliver operating earnings growth this financial year.

FY 2022 guidance

Bega has provided guidance for normalised EBITDA in the range of $195 million to $215 million. This will be an increase of 37% to 51% from $142 million in FY 2021.

However, as strong as this growth may be, it is short of what many in the market were expecting, which explains why the Bega share price is sinking today. A recent note out of Bell Potter, for example, reveals that it was forecasting EBITDA of $223.1 million in FY 2022.

Following today’s decline, the Bega share price is now trading lower year to date.

The post Why the Bega (ASX:BGA) share price is sinking 9% today appeared first on The Motley Fool Australia.

More reading

• Broker names 3 ASX consumer good shares to buy in 2022

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 Bruce Jackson.

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With the help of $0-brokerage platforms, plenty of Australian investors have been getting into US shares the past couple of years.

According to National Australia Bank Ltd. (ASX: NAB)’s popular online trading platform nabtrade, foreign businesses that are at the forefront of “decarbonisation and technology” are especially popular.

So much so that Australian investors now hold more Tesla Inc (NASDAQ: TSLA) shares than blue chip S&P/ASX 200 Index (ASX: XJO) stocks like Woolworths Group Ltd (ASX: WOW).

“To see an international stock, particularly a newer, more volatile company like Tesla, just outside the top 10 holdings on nabtrade is extraordinary,” said nabtrade investor behaviour director Gemma Dale.

“The trend of buying direct international shares has been growing at a much higher rate than domestic shares for the last 5 years.” 

Perhaps as a collective indictment on the behaviour of Australian businesses, more nabtrade investors now own shares in the electric vehicle maker than ASX carbon emitters like Rio Tinto Limited (ASX: RIO) and Woodside Petroleum Limited (ASX: WPL).

Dale said overseas stocks are scratching an itch that can’t be easily done with local shares.

“We are seeing a rise in interest in specific sectors that are not well represented on the ASX, such as solar energy, electric vehicles and green hydrogen.”

Similar to Tesla, Saxo Markets this week revealed fellow electric car maker Rivian Automotive Inc (NASDAQ: RIVN) was the 4th most traded stock among Australians on its platform last month.

Rookie investors aren’t necessarily speculators

According to nabtrade, the stereotype that younger, inexperienced investors have debuted in the market the past 18 months looking for a quick buck doesn’t necessarily hold true.

“New investors still prefer to start their investing journey on the ASX, with ASX 200 ETFs in the top 10 buys, along with the big four banks, BHP Group Ltd (ASX: BHP) and CSL Limited (ASX: CSL).”

According to Dale, investors start looking elsewhere after they create a basket of “safe” local stocks.

“Once investors have established a domestic portfolio – either an ETF or a handful of stocks, they are starting to look offshore for growth.”

Younger investors were also more likely to practise buy-and-hold. Nabtrade figures showed 80% of generation Y users holding their shares for more than 4 months, while just 70% did that among baby boomers.

Nabtrade has seen an incredible 200% growth in new accounts over this year. This rate peaked in 2020 at 500% from new investors “buying the dip” during the COVID-19 crash that year.

The post Aussie investors now hold more Tesla than Woolworths (ASX:WOW) appeared first on The Motley Fool Australia.

More reading

• Why Tesla stock jumped on Tuesday
• Why are Aussies going mad for this $0 revenue company?
• Woolworths (ASX:WOW) share price rises as boss courts API pharmacists
• Fed up with term deposits? How to get 10% income from ASX shares
• What experts are saying about the Woolworths (ASX:WOW) share price in 2022

Motley Fool contributor Tony Yoo owns CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended CSL Ltd. 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 Bruce Jackson.

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Owners of Woodside Petroleum Limited (ASX: WPL) shares can rejoice knowing their investment is continuing its push into hydrogen energy.

The company has entered a memorandum of understanding that will see it studying the potential of a liquid hydrogen supply chain. That could see Western Australian hydrogen being shipping to Singapore and, potentially, Japan in the future.

 It’s the second hydrogen-related announcement made by Woodside in as many months. In October, the company announced its plan to build a hydrogen and ammonia production facility in Perth.

Right now, the Woodside share price is $21.69.

Let’s take a closer look at the latest hydrogen ambitions from the oil and gas producer.

What could hydrogen exports mean for Woodside shares?

Woodside is collaborating with Keppel Data Centres, City Energy, Osaka Gas Singapore, and City-OG Gas Energy Services to find if an export corridor for the ultra-cold power source can be created from Perth.

The study will be looking to cool hydrogen to below -253˚C, putting it in its liquid state, before potentially shipping to the island nations.

Woodside CEO, Meg O’Neill states, if successful, the agreement will result in the company diversifying its portfolio – that’s likely good news for its shares. She said:

It is important for us to work collaboratively with potential customers and end users such as Keppel Data Centres, Osaka Gas Singapore, City Energy, and City-OG Gas Energy Services to collaboratively build out a sustainable hydrogen supply chain from our proposed H2Perth Project.

The H2Perth Project has the potential to be one of the largest facilities of its kind in the world. It could produce up to 1,500 tones of hydrogen for export every day.

Further, the company notes it may help kickstart Perth’s hydrogen economy, with local refuelling stations potentially becoming operational in 2023.

The newly announced study is set to continue until the middle of next year. Then, the parties will decide on the next phase of their collaboration.

Among its aims, is lowering the carbon emissions of cities. Doing so is in line with Singapore’s Green Plan.

Right now, the Woodside share price is 5.9% lower than it was at the start of 2021. It has also tumbled 3.3% over the last 30 days.

The post Woodside (ASX:WPL) just signed a key hydrogen export MOU. What does this mean for its shares? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday
• Why is the Woodside (ASX:WPL) share price on the slide this week?
• Fed up with term deposits? How to get 10% income from ASX shares
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Brooke Cooper 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 Bruce Jackson.

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The Magellan Financial Group Ltd (ASX: MFG) share price is on watch this morning amid reports emerging of the company’s founder and chair, Hamish Douglass’ response to intense rumours.

Douglass has hit back at media scrutiny facing both himself and the company this week, with his response hitting headlines at yesterday’s close.

It followed reports by the press stating that his separation from his wife might cause the company financial harm.

He also addressed the major issue likely concerning investors.

Magellan was dropped by its largest client, St James’s Place on Monday. The UK wealth management business’ account previously made up 12% of Magellan’s revenue. Its share price tumbled 32.9% as a result.

As of yesterday’s close, the Magellan share price is $19.93. That’s 3% lower than it was at the end of Tuesday’s session.

Let’s take a closer look at Douglass’ response to media reports on Magellan’s recent struggles.

Magellan share price in focus amid Douglass’ response

The Magellan share price is in focus on Thursday after Douglass appeared in an interview to address circulating rumours.

Douglass said suggestions he or his wife, Alexandra, would “dump” shares in the company as a result of their separation were “absurd”.  

Douglass said, “we’ve never sold a single share in Magellan” and “there’s a time when people should really stay out of people’s personal lives”. He noted:

People have tried to create an image that my wife and I are in some nasty divorce. Nothing could be further from the truth.

Douglass also spoke on the loss of the major mandate the company previously had with St James’s Place.

He said he’s “disappointed” by the loss of the St James’s Place account. However, he assured shareholders and investors it won’t majorly impact the company. Douglass continued, saying:

Their mandate was a different mandate in global equity. it was a very bespoke mandate…

Their decision to withdraw doesn’t have an impact on any other clients and importantly, it doesn’t have that larger impact on our business… We will still have some of the highest operating margins of any fund management business in the world, with very substantial cash flow.

The loss of St James’s Place’s account will likely have a 6% impact on the company’s financial year 2022 revenue.

The challenges currently facing Magellan come just weeks after the company’s long-term CEO, Dr Brett Cairns resigned.

Yesterday, reports emerged that Cairns stepped down due to clashes with the company’s board and Douglass. The company reportedly denied any such fallout occurred.

This week’s fall has added to the woes the Magellan share price has faced on the ASX lately. Right now, the company’s stock is trading for 62% less than it was at the start of 2021.

The post Douglass speaks out: ‘We’ve never sold a single share in Magellan’ appeared first on The Motley Fool Australia.

More reading

• Why Brickworks, Charter Hall, Magellan, and Rio Tinto shares are falling
• Magellan (ASX:MFG) share price flops as fresh talk of turmoil at the top emerges
• Is it a sell? Why is Morgans saying ‘avoid’ the Magellan (ASX:MFG) share price?
• Why Australian Clinical Labs, Magellan, Sandfire, and Telix shares are rising
• ASX 200 (ASX:XJO) midday update: Magellan rebounds, Pilbara Minerals sinks

Motley Fool contributor Brooke Cooper 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 Bruce Jackson.

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Looking for a growth share or two to buy in 2022? Two that could be worth considering are listed below.

Both look well-placed for growth during the 2020s. Here’s what you need to know about these ASX growth shares:

Allkem Limited (ASX: AKE)

Allkem could be a growth share to buy in 2022. It is the top five global lithium mining company that was created with the merger of Galaxy Resources and Orocobre. Allkem owns a collection of high-quality assets including Olaroz, Mt Cattlin, and the Sal de Vida brine project. Importantly, unlike a growing number of explorers on the Australian share market, Allkem is already producing lithium in large quantities. This means that it is benefiting greatly from the record lithium prices being underpinned by the clean energy transition and the rapid adoption of electric vehicles.

The good news is that Macquarie expects these high prices to remain for at least four years, which bodes well for the future. In light of this, the broker has put an outperform rating and $13.60 price target on its shares.

ResMed Inc. (ASX: RMD)

Another ASX growth share to consider is ResMed. It is focused on the development, manufacture, distribution, and marketing of medical devices and cloud-based software applications that diagnose, treat and manage respiratory disorders. These include sleep disordered breathing (SDB), chronic obstructive pulmonary disease (COPD), neuromuscular disease, and other chronic diseases. Thanks to its world class portfolio, huge market opportunity, and wide distribution network, ResMed appears well-placed for growth again over the 2020s. Particularly given a major product recall from a key rival.

Credit Suisse is very positive on ResMed and expects it to benefit greatly from the aforementioned product recall by Philips. In light of this, it has slapped an outperform rating and $43.00 price target on the company’s shares.

The post 2 excellent ASX growth shares offering big potential returns in 2022 appeared first on The Motley Fool Australia.

More reading

• Macquarie names the best ASX lithium shares to buy in 2022
• Why analysts love these ASX 200 blue chip shares
• 3 ASX 200 shares with major upside potential in 2022
• 3 excellent ASX growth shares analysts are excited about
• Is the IGO (ASX:IGO) share price a better buy than Allkem?

Motley Fool contributor James Mickleboro owns Orocobre Limited. 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 recommended ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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There are some S&P/ASX 200 Index (ASX: XJO) shares that are leaders in Australia, or even in multiple countries. But are they buys at the moment?

Businesses that are leaders usually have strong competitive advantages that helped get them to the top and also are keeping them there.

However, business strength is one thing. Analysts also like to evaluate whether a share price is good value at the time before calling something a buy.

Let’s have a look at these two leading ASX 200 share:

JB Hi-Fi Limited (ASX: JBH)

JB Hi-Fi is one of the leading retailers of electronics and home appliances in Australia (and New Zealand) with its three operating brands – JB Hi-Fi Australia, JB Hi-Fi New Zealand and The Good Guys.

The broker Ord Minnett recently decided to upgrade its thoughts on JB Hi-Fi from a hold to a buy, with a price target of $54 – that’s more than 10% higher than where it is today.

Ord Minnett thinks households are going to keep buying products from JB Hi-Fi at levels elevated compared to pre-COVID. It also thinks that people will continue spending on items on their homes, whilst the return on spending on travel remains slow. Retail can continue to benefit from indirect pandemic impacts.

According to the broker, the JB Hi-Fi share price is valued at 13x FY22’s estimated earnings with a projected grossed-up dividend yield of 7.6% from the ASX 200 share.

In the first quarter of FY22, JB Hi-Fi Australia sales were only down 7.5% on FY21, but up 17.3% on FY20. The Good Guys sales were down 5.6% on FY21 but up 23.6% on FY20.

Xero Limited (ASX: XRO)

Xero is a leading global cloud accounting business for small and medium businesses. It has a notable presence in a number of countries including New Zealand, Australia, the UK, the USA, South Africa and Singapore.

Opinions are mixed on the ASX tech share.

The brokers at Citi currently rate it as a buy, with a price target of $160. That’s more than 10% higher than where it is today. However, the broker is keeping an eye on the UK competitor Sage which is focusing more on the smaller accounting software segment.

However, UBS has a much lower price target of $88 on the ASX 200 share, calling it a sell. That’s around 40% lower than where it is today. Whilst the broker sees the continuing growth of subscribers and its annualised recurring revenue (ARR), the Xero share price is too high for the broker to be interested.

The FY22 half-year result showed total subscriber growth of 23% to 3 million, whilst annualised monthly recurring revenue (AMRR) went up 29% to NZ$1.13 billion. Looking at some individual markets, Australia added 124,000 net subscribers, to finish with 1.24 million subscribers and the UK added 65,000 net subscribers to end with 785,000 subscribers.

The post Are these 2 strong ASX 200 shares buys? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX shares today
• These 3 ASX 200 shares are topping the volume charts on Wednesday
• 2 strong ASX 200 dividend shares to own for income
• Why is the BetaShares Crypto Innovators ETF (ASX: CRYP) share price leaping higher today?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Xero. The Motley Fool Australia owns and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Ask A Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Perennial Value Management portfolio management director Stephen Bruce explains why an Australian investment bank is still the one stock he’d want to hold onto for dear life.

The ASX share for a comfortable night’s sleep

The Motley Fool: If the market closed tomorrow for 4 years, which stock would you want to hold?

Stephen Bruce: I wouldn’t change my answer from last time. I still think if you want to pick a stock which will adapt to whatever the environment is presenting, I think Macquarie Group Ltd (ASX: MQG) have demonstrated that they’re an organisation that — despite the fact that they’ve grown very large — they’ve still managed to maintain that flexibility and nimbleness and adaptability to see where opportunities are and take them. And similarly, to see when things are on the decline and to move out of things that have seen their best days. 

So long as they maintain that ability, which I think is pretty well ingrained into the culture of management there, I think you can rely on Macquarie to be doing the right thing in whatever the circumstances are.

If we think about the outlook now and what we think it might be like in 4 years, if you continue on with the green and energy transition theme, Macquarie [has] largely invented it. They were the leaders in infrastructure as pioneers of infrastructure-as-an-asset class.

And now that’s obviously becoming a very crowded space, but they’ve proactively moved down the value chain into greenfield developments and actually creating the assets rather than just buying them. They have this early mover position in greenfield renewable projects et cetera and I think that’ll only get stronger for them.

MF: The share price has gone up a lot since we last spoke. Do you still think it’s good value?

SB: It’s nowhere near the value it was when it was $140, but you can make an argument that if we look at it now, it’s probably operating in the best conditions you can imagine really across all of its businesses. 

The banking’s buoyant, so the investment banking backdrop is really, really strong. People are fighting for infrastructure assets so prices are really, really high. There’s heaps of money flowing into the funds they manage. The performance bids will be good. 

With asset prices being really high, their principal realisation gains will be really strong. And then with the commodities prices being way high and being volatile in general, that’s really good for their trading businesses, which is becoming an increasingly large part of their operations. So that should be firing as well as people do more hedging, et cetera. 

They’re in a really good patch and probably, as I said, whatever transpires they’ll adapt to it. The [current] valuation’s probably reasonable, but the earnings I think could actually surprise on the upside and make it all look better.

The post The ASX share I’d hold onto no matter what: expert appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Rio Tinto’s lithium acquisition, Pilbara Minerals jumps
• Should Appen (ASX:APX) shareholders worry about Amazon in 2022?
• Where are Macquarie (ASX:MQG) shares headed in 2022?
• The Altium (ASX:ALU) share price has risen 20% this year. What’s the outlook for 2022?
• Frontrunners emerge in Macquarie (ASX:MQG) VicRoads play

Motley Fool contributor Tony Yoo owns Macquarie Group Limited. 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 recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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With savings accounts and term deposits still offering very low interest rates, the share market arguably remains the best place to earn a passive income.

But with so many dividend shares to choose from, it can be hard to decide which ones to buy. To help narrow things down, I’ve picked out two that are highly rated right now. They are as follows:

Baby Bunting Group Ltd (ASX: BBN)

The first ASX dividend share to consider is Baby Bunting. It is a baby products retailer with a strong and growing presence both online and through its collection of 60 national superstores across Australia. Combined, this makes Baby Bunting the clear leader in a less discretionary category with around 300,000 births a year in Australia.

Positively, management still sees significant room to grow its store network in the future, which gives it a long runway for growth over the next decade. It is partly for this reason that the team at Citi is bullish on Baby Bunting. Its analysts have a buy rating and $6.11 price target.

Citi commented: “We reiterate our Buy rating and see the company having a range of multi-year growth strategies including rollout (target of 110+ stores, with 68 expected by end of FY22e), exclusive/private label growth and supply chain efficiencies.”

The broker has also pencilled in fully franked dividends per share of 16 cents in FY 2022 and 20 cents in FY 2023. Based on the current Baby Bunting share price, this will mean yields of 3% and 3.7%, respectively.

Charter Hall Social Infrastructure REIT (ASX: CQE)

Another ASX dividend share to look at is the Charter Hall Social Infrastructure REIT. It is a real estate investment trust with a focus on social infrastructure properties.

These properties are in high demand, which underpinned a 100% occupancy rate and a weighted average lease expiry (WALE) in excess of 15 years in FY 2021. And with approximately three-quarters of its tenancies on fixed rent reviews, the company’s future growth looks very positive.

Goldman Sachs is positive on the company. The broker currently has a conviction buy rating and $4.13 price target on its shares. Its analysts note that the Charter Hall Social Infrastructure REIT has just announced the acquisition of two childcare portfolios (in Western Australia and Melbourne) for a total price of $134.3 million and a passing yield of 4.6%.

In response the broker said: “The acquisitions solidify our view that the REIT is positioned for a solid growth outlook given its strong balance sheet with headroom and liquidity to pursue investment opportunities on the back of recent solid asset valuations.”

As for dividends, Goldman is forecasting dividends per share of 17.1 cents in FY 2022 and 17.5 cents in FY 2023. This implies yields of 4.5% and 4.6%, respectively.

The post Brokers rate these ASX dividend shares as buys appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares rated as strong buys by brokers
• 2 buy-rated ASX dividend shares with strong yields
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• Analysts name 2 ASX dividend shares to buy

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 recommended Baby Bunting. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The last 12 months has been very strong for the Pilbara Minerals Ltd (ASX: PLS) share price. In 2021 to date, shares of the lithium miner have risen by more than 210%.

Pilbara has benefited from a strong increase in the lithium price and demand is expected to continue to rise over the coming years.

What is the analyst outlook for the Pilbara Minerals share price in 2022?

Brokers are pretty mixed on the business.

On the one hand there is a broker like Macquarie Group Ltd (ASX: MQG) which thinks that Pilbara Minerals is a buy, with a price target of $3.70. That’s around 35% higher than where it is today.

Macquarie thinks that lithium prices will continue to remain strong into 2022 and this will help the company’s earnings. The broker thinks earnings will be stronger in the next few years thanks to that strong commodity price.

According to Macquarie, the Pilbara Minerals share price is valued at 9x FY23’s estimated earnings.

However, there are also some analysts that are not so confident on the business.

For example, Credit Suisse actually has a sell/underperform rating on the lithium miner.

Credit Suisse’s price target on Pilbara Minerals is just $2.05. That implies that the share price could drop by more than 20% over the next 12 months.

This broker doesn’t think that the lithium miner is going to earn as much in FY22 or FY23, compared to Macquarie’s forecast.

Looking at Credit Suisse’s numbers, the Pilbara Minerals share price is valued at 29x FY23’s estimated earnings.

What’s happening with the lithium price?

Pilbara Minerals says that the lithium market conditions remain very strong, with high demand and constrained supply leading to record product pricing, which is still “trending higher”.

The lithium miner said that the average price received in the three months to December 2021 was expected to be at the high end of the prior guidance (being US$1,650 to US$1,800 per dmt).

However, this quarter and FY22 annual concentrate production and shipping guidance has been revised due to delays with commissioning, ramp-up initiatives and extended plant shutdowns (both planned and un-planned) at both processing plants.

There has been an industry-wide shortage of skilled personnel in construction production and maintenance roles currently being experienced across the WA resource sector.

The production for the three months to December 2021 has been revised to 85kt to 95kt of spodumene concentrate, when it was previously 90kt to 115kt. FY22 shipped tonnes has been reduced to 380kt to 440k (down from the previous 440kt to 490kt.

The post What is the 2022 outlook for the Pilbara Minerals (ASX:PLS) share price? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• These 3 ASX 200 shares are topping the volume charts on Wednesday
• Why Afterpay, Lovisa, Liontown, and Pilbara Minerals shares are racing higher
• Here’s why the Pilbara Minerals (ASX:PLS) share price is bouncing back 8% today
• ASX 200 (ASX:XJO) midday update: Rio Tinto’s lithium acquisition, Pilbara Minerals jumps

Motley Fool contributor Tristan Harrison 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 recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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