ASX 200 lithium shares are being bludgeoned on Friday following news out of Shanghai that lithium prices have fallen to their lowest level since January 2022.

Here is a summary of today's share market activity:

• The Allkem Ltd (ASX: AKE) share price is down 7.2% to $11.56
• The Pilbara Minerals Ltd (ASX: PLS) share price is down 6.1% to $4.02
• The Liontown Resources Ltd (ASX: LTR) share price is down 6.2% to $1.59
• The Sayona Mining Ltd (ASX: SYA) share price is down 6% today to 24 cents
• The IGO Ltd (ASX: IGO) share price is down 6% to $12.98
• The Mineral Resources Ltd (ASX: MIN) share price is down 5.3% to $84.30
• The Core Lithium Ltd (ASX: CXO) share price is down 4.5% to 96 cents.

What's behind the drop in ASX 200 lithium shares on Friday?

The Australian Financial Review (AFR) reports the lithium carbonate equivalent price has fallen to US$49,757 per tonne, according to Shanghai Metals Market data.

Lithium carbonate has been on a sustained decline since November 2022. Back then, the commodity was trading above US$86,100 per tonne. It has since lost 42% of its value.

Lithium prices are directly influenced by global demand for electric vehicles (EVs). Analysts are blaming China's cessation of EV subsidies this year for the continuing slide in lithium prices.

Top broker Goldman Sachs has been bearish on lithium prices since mid-2022.

In its latest forecast released before today's fall in the carbonate price, Goldman said all types of lithium would dramatically fall in value over the next few years.

The broker thinks supply will start to outweigh demand, thereby putting downward pressure on spot prices from 2H FY23.

Here are Goldman's forecasted prices.

Carbonate (per tonne)

• Spot price today: US$49,757
• 2023: US$53,300
• 2024: US$11,000
• 2025: US$11,000

Hydroxide (per tonne)

• Spot price today: US$72,600
• 2023: US$58,650
• 2024: US$12,500
• 2025: US$12,500

Spodumene 6% (per tonne)

• Spot price today: US$5,080
• 2023: US$4,330
• 2024: US$800
• 2025: US$800

The post Why are ASX 200 lithium shares falling so hard today? appeared first on The Motley Fool Australia.

Here's why brokers think investors ought to buy them next week:

Allkem Ltd (ASX: AKE)

According to a note out of Goldman Sachs, its analysts have reiterated their buy rating on this lithium miner's shares with a slightly trimmed price target of $15.40. This follows the release of Allkem's first-half results, which came in slightly ahead of expectations. Allkem remains Goldman's preferred lithium exposure due to its discount to peers and its optionality across the Americas and Australia on the largest lithium resource under its coverage. The Allkem share price ended the week at $12.36.

Harvey Norman Holdings Limited (ASX: HVN)

Another note out of Goldman Sachs reveals that it analysts have retained their buy rating on this retail giant's shares with a trimmed price target of $4.70. Although Harvey Norman's first-half results fell short of expectations, Goldman remains positive for a number of reasons. This includes its dirt cheap valuation compared to peers and its belief that the peak cash drag on franchisee support is behind it. The Harvey Norman share price was fetching $3.71 at Friday's close.

Pointsbet Holdings Ltd (ASX: PBH)

Analysts at Bell Potter have retained their speculative buy rating on this sports betting company's shares with a reduced price target of $2.75. This follows a mixed half-year result with Pointsbet's revenue beating expectations but its loss coming in greater than forecast. Nevertheless, the broker remains positive given its very large opportunity in the North American sports betting market. The Pointsbet share price ended the week at $1.43.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

The S&P/ASX 200 Index (ASX: XJO) ended the week on a high, gaining 0.39% to close at 7,283.6 points. That sees it having recovered all but 0.29% of Monday's losses.

Helping it along on Friday was the S&P/ASX 200 Communications Index (ASX: XTJ). It rose 0.9%.

Bank stocks also had a good run into the weekend, with the S&P/ASX 200 Financials Index (ASX: XFJ) lifting 0.5%.

Meanwhile, mining giants helped drive the S&P/ASX 200 Materials Index (ASX: XMJ) 0.5% higher.

On the other hand, the S&P/ASX 200 Real Estate Index (ASX: XRE) was the worst performer, falling 0.3%.

So, with most of the market trading in the green on Friday, which ASX 200 share posted the biggest gains? Let's take a look.

Top 10 ASX 200 shares countdown

Taking out the index's top spot today was the Liontown Resources Ltd (ASX: LTR) share price.

It roared 13% higher to close at $1.63 on Friday. And that could be just the beginning if Bell Potter is to be believed. The broker recently tipped the lithium hopeful's stock to soar to $2.81, my Fool colleague James reports.

These shares made today's biggest gains:

Our top 10 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

It's been a very positive day indeed for ASX shares and the S&P/ASX 200 Index (ASX: XJO) this Friday. As we barrel towards the weekend, the ASX 200 has put on a healthy 0.42% at the time of writing, placing the index at just under 7,290 points. But that's nothing compared to the bonanza currently being enjoyed by the Liotnown Resources Ltd (ASX: LTR) share price. 

Liontown shares are on fire today, no other way to put it. This ASX 200 lithium stock closed at $1.44 a share yesterday and opened at $1.42 this morning. But as it presently stands, Liontown has rocketed by a whopping 12.15% up to $1.62 a share.

So what's going on with Liontown that might have elicited such a dramatic jump in valuation?

Well, it's not entirely clear, unfortunately. There hasn't been much in the way of news or announcements out of Liontown itself today. Or indeed, this month so far.

Looking at other ASX 200 lithium shares, we do see some gains. For example, Pilbara Minerals Ltd (ASX: PLS) shares are up a decent 2.33% so far to $4.18 each. Core Lithium Ltd (ASX: CXO )is up by 2.12% at 97 cents a share. And the Allkem Ltd (ASX: AKE) share price has risen by 1.94% to $12.34.

So some healthy moves, but none on Liontown's level.

What's with the Liontown share price spike then?

It's possible that Liontown shares' sharp rise can be explained by a recent broker recommendation on Liontown. As we covered just yesterday, ASX broker Bell Potter has come out with a speculative buy rating on Liontown shares.

The broker gives the Liontown share price a 12-month target of $2.81. If realised, this would result in an upside of more than 75% from where the shares are right now (after today's monster move higher).

That would obviously be a very alluring prospect for investors and could explain why we are seeing such a noticeable rush into the Liontown share rice this Friday.

Liontown has already had a great start to 2023. Over the year to date, the Liontown share price has now risen by a pleasing 30.9%:

Even so, the company remains down more than 26% from its most recent 52-week high of $2.22 a share. So no doubt investors will be encouraged by what they've seen today. But we'll have to wait and see if Liontown indeed does make it to $281 a share over the next 12 months.

The post Why is the Liontown share price roaring 12% higher today? appeared first on The Motley Fool Australia.

Here's how Australia's top five lithium shares have performed since the closing bell rang last Friday:

• Pilbara Minerals Ltd (ASX: PLS) shares are down 9.7%
• Core Lithium Ltd (ASX: CXO) shares are down 1.0%
• Allkem Ltd (ASX: AKE) shares are up 2.6%
• IGO Ltd (ASX: IGO) shares are up 3.2%
• Mineral Resources Ltd (ASX: MIN) shares are up 6.8%

So, what's been impacting ASX 200 lithium stocks this week?

ASX 200 lithium stocks eye China production curbs

Some surprising news came out of China this week, with lithium ore-processing operations in Yichun, Jiangxi province ordered to halt operations.

This came as Chinese officials launched an investigation into the lithium miners in the province over potential environmental violations. With Yichun producing roughly 10% of the annual global lithium supply, investors in ASX 200 lithium stocks were keeping an eye on the developments.

It remains unclear how long the operations will remain offline.

This week also saw Goldman Sachs come out with a new, decidedly bearish forecast for lithium prices. The broker cited the risk of "higher than expected lithium supply" in China, coupled with ASX 200 lithium stocks "recently outperforming production expectations [and] increasing near term production guidance".

What helped lift the Mineral Resources and Allkem share prices?

Both Allkem and Mineral Resources are in the green over the week, potentially bolstered by some positive broker coverage.

Analysts at Bell Potter released bullish coverage on Mineral Resources, with a buy rating on the stock and a $110 price target. That's 21% above the Mineral Resources current share price.

Bell Potter noted that the ASX 200 lithium stock reported a higher profit for the six months ending 31 December than it generated in the entire 12-month period preceding that. And its analysts expect more strong growth ahead.

Meanwhile, Allkem was tipped as a buy this week by Goldman Sachs, despite the broker's rather dire outlook for lithium prices.

Goldman has a $15.40 12-month price target on Allkem shares, 26% above the current share price. "Allkem has one of the best production outlooks in our lithium coverage," the broker noted.

Why did the Pilbara Minerals share price underperform this week?

While not accounting for all of this week's underperformance, much of Pilbara Minerals' sell-off this week was due to its shares trading ex-dividend yesterday.

A week ago Friday, Pilbara Minerals reported on its half-year results.

On the back of a stellar 989% year on year increase in statutory net profit after tax (NPAT), the ASX 200 lithium stock rewarded investors with its first-ever dividend of 11 cents per share, fully franked.

It's pretty standard for stocks to lose as much, or slightly more, than their dividend payouts on the day they trade without those rights. And Pilbara Minerals proved no exception.

The post What's happening with ASX 200 lithium stocks this week? appeared first on The Motley Fool Australia.

If you're wanting to gain exposure to the sector, then you may want to check out the three ASX 200 mining shares listed below. Here's why they have been named as buys:

Allkem Ltd (ASX: AKE)

The first ASX 200 mining share to consider is Allkem. It is one of the world's largest lithium miners with projects in Argentina, Australia, and North America that provide it with significant production growth potential. It is because of this that Goldman Sachs is bullish on Allkem even though it is very bearish on lithium prices. It notes that "Allkem has the best LCE growth outlook with production growing >4x to FY27E with further downstream optionality on carbonate production."

Goldman has a buy rating and $15.40 price target on Allkem's shares.

Pilbara Minerals Ltd (ASX: PLS)

Another ASX 200 mining share to look is Pilbara Minerals. It could be a top option if you're bullish on lithium and expect demand for the battery making ingredient to outstrip supply and keep prices higher for longer. Morgans believes that will be the case and suspects that "demand in the Chinese market could increase from March onwards."

Morgans currently has an add rating and $5.30 price target on this lithium miner's shares.

South32 Ltd (ASX: S32)

A final ASX 200 mining share to consider is South32. It is a diversified mining and metals company that produces a range of commodities including aluminium, copper, manganese, and nickel. As these metals will play a key role in the decarbonisation of the planet, South32 looks well-placed for the long term. Morgans is also a fan of South32 and believes its portfolio transformation is "substantially boosting group earnings quality, as well as S32's risk and ESG profile."

Morgans currently has an add rating and $5.60 price target on the miner's shares.

The post Buy these ASX 200 mining shares before they boom: experts appeared first on The Motley Fool Australia.

There's been plenty of insider buying among S&P/ASX 200 Index (ASX: XJO) shares this week, with one director snapping up a whopping $198,000 stake in their company.

Let's take a closer look at all the action going down among market favourites.

6 ASX 200 directors buying their own companies' shares

The spotlight might be on ASX 200 lithium share Allkem Ltd (ASX: AKE) this week after the company's chair Peter Coleman snapped up a sizeable chunk of its securities.

He bought 17,054 Allkem shares between Friday and Tuesday, paying an average of around $11.61 apiece to more than double his holding. That equals a total spend of nearly $198,000.

The buying spree saw the boss bolstering his stake for a bargain price if Goldman Sachs is to be believed. The top broker tipped the Allkem share price to soar to $15.40 earlier this week, as my Fool colleague James reports.

Also the subject of insider buying this week is Charter Hall Retail REIT (ASX: CQR). The real estate investment trust's (REIT's) chair Roger Davis bought 38,669 units for around $3.98 apiece on Monday.

Over at banking giant Commonwealth Bank of Australia (ASX: CBA), director Anne Templeman-Jones was buying. She snapped up 300 shares for an average price of $101.10 apiece.

Meanwhile, Bapcor Ltd (ASX: BAP) saw not one, but two board members buying up its shares this week.

Chair Margaret Anne Haseltine bought 7,515 shares for $6.65 apiece while director Brad Soller bought 7,500 for the slightly higher price of $6.66 apiece.

Gold miner Regis Resources Ltd (ASX: RRL) has also seen insider buying this week. Director Paul Arndt bought into the company on Tuesday, acquiring 9,273 shares for a total of around $15,857, or approximately $1.71 apiece.

And finally, Healius Ltd (ASX: HLS) chair Jenny McDonald bolstered her stake in the pathology giant, buying 37,500 shares for $2.751 apiece – a total spend of around $103,000.

The post 6 ASX 200 directors buying up their companies' shares this week appeared first on The Motley Fool Australia.

In morning trade, the lithium miner's shares are down 3% to $11.55.

That's despite some potential positive news out of the miner.

Insider buys Allkem shares

With Allkem shares down by almost a third from their 52-week high of $16.75 amid concerns that lithium prices could soon tumble, one of the company's directors appears to believe this has created a buying opportunity.

According to a change of director's interest notice, Allkem's non-executive chairman, Peter Coleman, has more than doubled his holding through a series of on-market purchases.

The notice reveals that Coleman picked up 17,054 shares across 24, 27, and 28 February at an average price of $11.6115 per share. This equates to a total consideration of just a touch under $200,000 and increases the chairman's holding to 33,025 Allkem shares.

Is this a smart move?

The team at Goldman Sachs is likely to approve of this purchase.

At the end of last week, the broker responded to Allkem's half-year results by retaining its buy rating with a slightly trimmed price target of $15.40. This implies potential upside of 33% for investors over the next 12 months.

It also means that those 17,054 shares that Coleman picked up in recent days would be worth approximately $262,000 if Allkem's shares rose to that level. That's over $60,000 more than the chairman's investment.

Why Allkem?

Goldman explained that it is positive on Allkem even if lithium prices tumble for the following reason:

Allkem has one of the best production outlooks in our lithium coverage, with broad-based growth optionality, second only to Mineral Resources on an LCE basis when including downstream hydroxide production on an equity basis. This drives our forecast for the company's equity LCE production growth of >4x by FY27E, supporting earnings rebounding to near current record levels despite the declining lithium price environment.

The post An insider just loaded up on Allkem shares: Should you buy into this lithium giant? appeared first on The Motley Fool Australia.

That's because analysts at Morgans have named these lithium shares as buys this week.

What is the broker saying about ASX 200 lithium shares?

The good news is that Morgans believes that lithium prices will remain higher for longer due to tight supply conditions.

It expects this to be driven by a post-holiday recovery in the Chinese electric vehicle (EV) market and lithium project delays. It explained:

Spot prices have softened but remain above contract prices. The Chinese EV market, still the world's largest, has slowed recently for the Spring Festival but we expect activity to increase in the near future. Meanwhile, lithium projects are taking longer to complete leaving the market tight. Decreasing lithium production but increasing demand reflected in analyst consensus of key Chinese companies points to tightness continuing.

In light of this, the broker believes that Allkem Ltd (ASX: AKE), Mineral Resources Ltd (ASX: MIN), and Pilbara Minerals Ltd (ASX: PLS) shares are buys, with fellow ASX 200 lithium share Liontown Resources Ltd (ASX: LTR) a higher risk speculative buy.

Its ratings are as follows:

• Add rating and $15.20 price target on Allkem's shares.
• Add rating and $102.00 price target on Mineral Resources' shares.
• Add rating and $5.30 price target on Pilbara Minerals' shares.
• Speculative buy rating and $1.96 price target on Liontown's shares.

Commenting on its ratings, the broker said:

We continue to prefer AKE amongst the lithium pure plays as we see a longer growth runway for production and greater potential valuation upside. PLS is generating strong cash flows and holds opportunities for more tactical trades given speculation about potential uses of the growing cash balance.

MIN has been more resilient than peers and offers more diversified commodity exposures. The potential upside is less than other lithium large caps but it has also shown less volatility and stronger potential dividend yield. We retain our ADD rating. We initiate coverage of LTR (SPECULATIVE BUY) and CXO (HOLD). Both are near-term developers of Australian spodumene deposits. We see upside for LTR if it can resolve its funding issues and avoid further significant cost increases.

The post 4 ASX 200 lithium shares to buy now: broker appeared first on The Motley Fool Australia.

The S&P/ASX 200 Index (ASX: XJO) traded in the green for much of Wednesday before plunging into the red at the last moment. It ended the day 0.09% lower at 7,251.6 points.

And mining shares led much of its gains, with the S&P/ASX 200 Materials Index (ASX: XMJ) coming in as today's top-performing sector. It rose 2.3% to regain all of its Monday losses.

The S&P/ASX 200 Energy Index (ASX: XEJ) also outperformed today, gaining 1.6% following a strong overnight session for oil prices.

Brent crude oil rose 1.7% to US$83.89 a barrel overnight while US Nymex crude oil lifted 1.8% to trade at US$77.05 a barrel.

But not all rejoiced today. The S&P/ASX 200 Communications Index (ASX: XTJ) fell 2.3% on Wednesday as Telstra Group Ltd (ASX: TLS) shares traded ex-dividend.

So, with all that covered, which ASX 200 share posted the index's biggest gain today? Let's take a look.

Top 10 ASX 200 shares countdown

Today's top-performing ASX 200 share was none other than Ramelius Resources Ltd (ASX: RMS). It gained 6.7% to close at $0.955 despite only silence from the gold miner.

These shares made today's biggest gains:

Our top 10 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

As the close of trading draws near, the top 5 best-performing shares of the S&P/ASX 200 Index (ASX: XJO) are all mining stocks.

Leading the bunch is ASX gold share Ramelius Resources Ltd (ASX: RMS), up 6.15% to 95 cents.

Next on the list is ASX lithium share Allkem Ltd (ASX: AKE), up 5.77% to $12.01.

Then we have gold miner Evolution Mining Ltd (ASX: EVN), whose share price is up 4.78% to $2.85.

It's followed by iron ore share Champion Iron Ltd (ASX: CIA), up 4.6% to $7.70.

Rounding out the top 5 are Mineral Resources Ltd (ASX: MIN) shares, up 4.6% to $86.34.

What's pushing ASX 200 mining shares higher?

Ramelius Resources has not reported any news today. However, Ramelius shares have risen by 14% since the miner released its 1H FY23 results on 21 February.

The miner reported a small decline in sales revenue to $304.8 million and a 33.7% decline in underlying EBITDA to $106.3 million. However, it reaffirmed its FY23 production guidance of between 240,000 ounces and 280,000 ounces at an all-in sustaining cost of between $1,750 per ounce and $1,950 per ounce.

Moving on to Allkem shares, which are shining brightly today after top broker Goldman Sachs backed the company to withstand the coming decline in lithium prices better than other ASX lithium shares.

The broker reckons there's a 30%-plus upside for Allkem shares over the next 12 months.

As my Fool colleague James reports, Goldman says Allkem's production growth potential and downstream opportunity will see it through a big decline in lithium prices over the next few years.

Evolution Mining told the ASX yesterday it has seen ongoing drilling success at its Ernest Henry site. Investors are excited about the news, with Evolution shares up 7% since the announcement.

Evolution Mining CEO Lawrie Conway said: "The significance of the recent drilling intercepts released today indicates that Bert, which is located adjacent to the open pit, is a sizable mineralisation domain that remains open down-plunge."

There's been no news from Champion Iron over the past three weeks.

Finally, Mineral Resources shares are also up on no news today. However, last week the company revealed incredible earnings growth in its 1H FY23 report.

Its net profit after tax (NPAT) went up 1,890% to $390 million over the half. Revenue increased by 74% to $2,350 million, driven by turbocharged lithium revenue of $997.2 million, up from $143 million year over year.

The post Why are ASX 200 mining shares leading the market today? appeared first on The Motley Fool Australia.

We'll get to that news in a tick.

First, here's how the top five lithium shares are performing in afternoon trade today:

• Pilbara Minerals Ltd (ASX: PLS) shares are up 2.4%
• Core Lithium Ltd (ASX: CXO) shares are up 2.7%
• Allkem Ltd (ASX: AKE) shares are up 5.2%
• IGO Ltd (ASX: IGO) shares are up 2.8%
• Mineral Resources Ltd (ASX: MIN) shares are up 3.49%

Looks like greed is trumping fear for investors in ASX 200 lithium stocks today.

But should they be concerned?

Why this 6% decline in China matters for ASX 200 lithium stocks

China produces approximately 75% of the world's lithium-ion batteries each year.

And the Middle Kingdom boasts by far the largest production and sales figures for EVs of any nation on Earth.

In December alone, the China Automobile Association reported China produced 795,000 EVs. And the nation's dealers dipped into their inventories, with a whopping 814,000 EVs sold.

The story was much the same throughout 2022. And this surge in demand helped drive lithium prices to all-time highs last year. Since that peak, prices have retraced some 30%. But many analysts are forecasting they could have further to fall.

The decline is partly demand related.

As Reuters reports, January saw a 6.3% decline in sales of EVs and plug-in hybrids in China. That's after the sector grew 90% in 2022.

Commenting on the potential impact, Barrenjoey analysts said, "While we remain positive on the long-term outlook for lithium, the short-term outlook is less clear, with a clear acceleration in China EV sales needed to allay market fears."

January's decline is likely linked to the government's plan to end subsidies for EVs. But it's fuelling concerns that demand growth may slow just as supply growth looks set to explode.

Too much lithium?

ASX 200 lithium stocks could come under pressure more from a potential excess supply hitting the markets than from any big fall in demand.

And some analysts are forecasting this will see prices for the battery-critical metal continue to fall.

Chinese spot prices for lithium carbonate have dropped from some 600,000 yuan ($128,000) per tonne at the November peak to around 400,000 yuan ($86,000) today.

Commenting on market dynamics, vice president at Rystad Energy Susan Zou said (as quoted by Reuters):

Demand is still healthy, but battery and EV makers are currently destocking instead of placing new orders. The subdued spot demand therefore is weighing on sentiment and pressing down prices..

A lithium carbonate price of 200,000-300,000 yuan per tonne is where both upstream and downstream will feel comfortable.

"Supply is coming on stream faster than you can say 'boo'," Ord Minnett analyst Dylan Kelly added. "Demand remains strong, but prices have been unsustainable for some time now."

Indeed, many lithium miners are not yet at the production stage. As they do begin producing, global supplies will ramp up.

Even among the ASX 200 lithium stocks, only Allkem, Mineral Resources, and Pilbara Minerals are currently producing.

Core Lithium looks to be next in line. Maiden spodumene concentrate production from its Finniss Lithium Project is expected to commence in the first half of 2023.

The post Investing in ASX 200 lithium stocks? Here's why this 6% decline in China matters appeared first on The Motley Fool Australia.

Four ASX shares that are climbing more than most today are listed below. Here's why they are starting the month strongly:

Allkem Ltd (ASX: AKE)

The Allkem share price is up 5% to $11.95. Investors have been buying this lithium miner's shares amid a rebound in the industry. In addition, a note out of Goldman Sachs may have given its shares a boost. The broker has reiterated its buy rating with a $15.40 price target. This implies potential upside of 29% from current levels.

Argosy Minerals Limited (ASX: AGY)

The Argosy Minerals share price is up 3.5% to 72 cents. This morning, this lithium developer announced that it has made further progress at the Rincon Lithium Project in Argentina. Argosy revealed the commencement of lithium carbonate batch production works, where 5.1 tonnes of battery quality product has currently been produced.

Mayne Pharma Group Ltd (ASX: MYX)

The Mayne Pharma share price is up 21% to $4.02. This appears to have been driven by recent news that it has signed an agreement for the sale of its US generics business. Management expects the transaction to create a leaner organisation and free up working capital to focus on core areas of business growth/value drivers. Another positive is management's belief that it is on course to return to profit.

NextDC Ltd (ASX: NXT)

The NextDC share price is up over 3% to $10.60. This follows the release of a number of bullish broker notes this morning in response to the data centre operator's half-year results. Citi was pleased with the company's performance, noting that "NextDC reported underlying EBITDA of $97.5 million, up +17% yoy, and +5%/6% ahead of CitiE/Visible Alpha consensus." It has a buy rating and $12.60 price target on the company's shares.

The post Why Allkem, Argosy Minerals, Mayne Pharma, and NextDC shares are racing higher appeared first on The Motley Fool Australia.

That's because share markets are forward-looking, with valuations tied to the profits and free cash flow that companies generate down the line.

And with so many lithium shares still in the development or exploration stage, the price of lithium when they finally start producing will have a big say in the profits they make and whether your investment is ultimately a success or failure.

Lithium price forecast

Unfortunately, I have some bad news for you. Goldman Sachs has reiterated its extremely bearish view that lithium prices are about to crash materially from current levels.

And while it expects Allkem Ltd (ASX: AKE) to be able to offset the impact of these declines on its earnings with its production growth and downstream opportunity, it may not be as easy for smaller and up-and-coming players.

According to the note, Goldman is now forecasting the following average prices for these lithium types in the coming years compared to current spot prices:

Lithium carbonate (per tonne)

• Spot: US$61,350
• 2023: US$53,300
• 2024: US$11,000
• 2025: US$11,000

Lithium hydroxide (per tonne)

• Spot: US$70,350
• 2023: US$58,650
• 2024: US$12,500
• 2025: US$12,500

Lithium spodumene 6% (per tonne)

• Spot: US$5,800
• 2023: US$4,330
• 2024: US$800
• 2025: US$800

Spot prices continue to fall

Earlier this week, the broker noted that spot and forwards prices have continued to come under pressure. It commented:

We note the lithium chemicals spot and forward pricing has continued to decline, with our commodities team reiterating their expectation for lithium prices to decline from 2H23, supported by recent China trip feedback suggesting risk of higher than expected lithium supply, and the larger operating Australian spodumene projects either recently outperforming production expectations (and increasing near term production guidance) or lifting medium term production growth targets.

The post Own ASX lithium shares? Here is the latest Goldman Sachs lithium price forecast appeared first on The Motley Fool Australia.

In morning trade, the ASX 200 lithium miner's shares are up 1% to $11.47.

This may have been driven by bargain hunters swooping in after Allkem's shares sank almost 13% in February.

One broker that is likely to approve of investors buying the company's shares today is Goldman Sachs. It has just released a note that tips the ASX 200 lithium giant's shares to rise materially from current levels.

Allkem share price tipped to rocket

According to the note, the broker has responded to the company's half-year results release by reiterating its buy rating with a $15.40 price target.

Based on the latest Allkem share price, this implies potential upside of 34% for investors over the next 12 months.

What did the broker say?

Goldman was pleased with the company's performance in the first half. It commented:

AKE reported underlying EBITDA/NPAT of US$433mn/US$210mn (excl. eliminations/ incl. NCIs) was +3%/-1% vs. our US$421mn/US$213mn estimates and +3%/-10% vs. Visible Alpha Consensus Data of US$422mn/US$234mn, with operating assets in line with expectations.

The broker also highlights that Allkem is expecting lithium prices to remain strong for the current quarter despite recent weakness in spot prices. It adds:

AKE reiterated their 3Q pricing guidance of ~US$53,000/t for third party Olaroz sales and 5% increase in realised spodumene pricing. On recent pricing movements, AKE pointed to regional indices convergence, geographic exposure, and pricing lags as potentially shielding them this half from recent Chinese chemicals price declines, highlighting their portfolio is mostly contracted sales (~80%/20% contracted/spot) with volumes mostly to China and Japan/Korea, with some spot volumes to Europe and North America.

Why buy Allkem shares if lithium prices will decline?

While Goldman's analysts "continue to expect lithium prices to decline from 2H23" they still believe Allkem shares represent a great option for investors in the industry.

This is because of the company's production growth potential and downstream opportunity, which it expects to support Allkem's earnings when prices decline. It explained:

Allkem has one of the best production outlooks in our lithium coverage, with broad-based growth optionality, second only to Mineral Resources on an LCE basis when including downstream hydroxide production on an equity basis. This drives our forecast for the company's equity LCE production growth of >4x by FY27E, supporting earnings rebounding to near current record levels despite the declining lithium price environment.

The post Broker says buy ASX 200 lithium share Allkem for 34% upside appeared first on The Motley Fool Australia.

The ASX 200 lithium stocks have been buoyed by soaring demand for lithium, a critical element in most EV batteries.

Although lithium prices have tumbled some 30% since hitting record highs last year, as short-term supply catches up to demand, the big miners are still handily outperforming the benchmark.

Here's how their share prices have moved over the last 12 months:

• Pilbara Minerals Ltd (ASX: PLS) shares are up 54%
• Core Lithium Ltd (ASX: CXO) shares are up 20%
• Allkem Ltd (ASX: AKE) shares are up 25%
• IGO Ltd (ASX: IGO) shares are up 19%
• Mineral Resources Ltd (ASX: MIN) shares are up 82%

So, why are these ASX 200 lithium shares watching China?

ASX 200 lithium shares eyeing 10% cut in global lithium supply

China is not only the world's top producer of EVs, but it also produces some 75% of the world's lithium-ion batteries. And according to the International Energy Agency, the Middle Kingdom accounts for around 60% of global lithium supplies.

And it's this supply-side factor that will be drawing the interest of ASX 200 lithium shares.

This comes as news breaks that environmental officials are investigating lithium miners in Yichun, Jiangxi province for breaching regulations.

Yichun produces approximately 10% of the annual global lithium supply.

As Bloomberg reports, ore-processing operations in Yichun have been brought to a halt as the investigation takes place. It's not yet known how long the closure orders will remain in place.

The refineries are still running.

What are the experts saying?

Commenting on the environmental crackdown that's being followed by ASX 200 lithium shares and miners around the world, Susan Zou, an analyst at Rystad Energy said, "This supervision may mean that the inspection and control over lepidolite mining in China will be more stringent in the future."

Lepidolite is a lithium-bearing mineral. And analysts had expected Jiangxi province would provide significant new supplies.

The big question now, and one which could well impact the price of lithium and hence ASX 200 lithium shares, is how long the shutdowns will last.

China's annual parliamentary meetings take place in March.

"At present, the market speculation is that the probe may stop after the two sessions in China next month," Zou said.

Chris Berry, president of industry consultancy House Mountain Partners, added (quoted by Bloomberg):

Any mine would typically have a stockpile of ore in place, so as long as the refineries are operating, you aren't likely to see any whipsaw in lithium pricing. Should these mines be halted for months, then this becomes a different story.

Certainly, a story worth following.

The post Why ASX 200 lithium shares are eyeing this surprising new Chinese move appeared first on The Motley Fool Australia.

Three top ASX shares that leading brokers have named as buys this week are listed below. Here's why they are bullish on them:

Allkem Ltd (ASX: AKE)

According to a note out of Goldman Sachs, its analysts have retained their buy rating on this lithium miner's shares with a slightly trimmed price target of $15.40. Goldman was pleased with Allkem's first-half result, noting that its EBITDA came in slightly ahead of expectations. Looking ahead, Allkem is Goldman's preferred lithium exposure due to its optionality across the Americas and Australia on the largest lithium resource under its coverage and its discount to peers at 0.85x NAV (versus peer average ~1.1x). The Allkem share price is trading at $11.25 today.

Jumbo Interactive Ltd (ASX: JIN)

A note out of Morgans reveals that its analysts have retained their add rating on this online lottery ticket seller's shares with a lowered price target of $16.50. Although Jumbo's half-year earnings were a touch short of expectations, the broker remains positive on the future due to the shift online. It also sees plenty of value in its shares at the current level. The Jumbo share price is fetching $13.90 this afternoon.

Mineral Resources Ltd (ASX: MIN)

Another note out of Morgans reveals that its analysts have retained their add rating on this mining and mining services company's shares with an improved price target of $102.00. While Mineral Resources' half-year result was short of consensus estimates, it was largely in line with what the broker was forecasting. Outside this, Morgans has upgraded its valuation of Mineral Resources' lithium operations. This has more than offset a downgrade to the valuation of its iron ore operations. The Mineral Resources share price is trading at $79.99 on Monday.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

S&P/ASX 200 Index (ASX: XJO) lithium shares have offered investors some very strong returns amid soaring prices for the battery-critical metal.

Yet while longer-term investors should be sitting on some healthy gains, not all of the blue-chip lithium stocks pay a dividend.

In fact, if you'd asked me yesterday, I would have said that only two of the five ASX 200 lithium shares currently offer investors a dividend payout.

But that figure jumped to three out of the five this morning, when Pilbara Minerals Ltd (ASX: PLS) reported stellar half-year results and announced its maiden dividend.

As of now, neither Core Lithium Ltd (ASX: CXO) or Allkem Ltd (ASX: AKE) shares offer dividend yields.

Which brings us to…

Which ASX 200 lithium share pays the highest dividend yield?

IGO Ltd (ASX: IGO) reported its half-year results on 31 January.

The ASX 200 lithium share reported record half-year net profit after tax (NPAT) of $591 million, up 550% from the $91 million reported in H1 FY22.

This saw the IGO board declare a record interim dividend of 14 cents per share, fully franked.

That brings IGO's full-year dividend payouts to 19 cents per share for a trailing yield of 1.4%.

Next up we have Mineral Resources Ltd (ASX: MIN).

Mineral Resources reported its half-year results this morning.

With the six-month NPAT up 1,890% year on year to $390 million, the Mineral Resources board offered up a boosted, fully franked interim dividend of $1.20 per share.

That brings the Mineral Resources full-year dividend payout to $2.20 per share for a trailing yield of 2.6%.

Finally, we have Pilbara Minerals.

As mentioned up top, Pilbara Minerals' board declared the first-ever dividend payout for the ASX 200 lithium share.

With NPAT for the six months soaring to $1.24 billion, up 989% from H1 FY22, Pilbara Minerals will pay an 11 cents per share, fully franked interim dividend.

At the current share price, that represents a trailing yield of 2.4%.

So the winner is…

With a 2.6% trailing dividend yield, Mineral Resources edges out Pilbara Minerals as the ASX 200 lithium share with the highest current yield.

Mineral Resources also leads the pack in share price gains, with its shares up 92% since this time last year.

The post Which ASX 200 lithium share takes the crown for dividend yield right now? appeared first on The Motley Fool Australia.

The Allkem Ltd (ASX: AKE) share price is climbing higher in morning trade after opening in the red.

The S&P/ASX 200 Index (ASX: XJO) lithium stock closed yesterday trading for $11.46 per share and opened this morning at $11.30 apiece. Its hares are currently swapping hands for $11.65 each, up 1.66%.

This comes after the release of Allkem's half-year results for the six months ending 31 December (H1 FY23).

Allkem share price higher on surging revenue and profits

Here are the highlights:

• Revenue of US$558 million, up 209% from H1 FY23
• Earnings (EBITDAIX*) increased 311% year on year to US$402 million
• Net profit after tax of US$219 million, up 1,592%
• Net cash balance at 31 December of US$552 million, up 32% from June

(*Earnings before interest, taxes, depreciation, amortisation, impairment, gains from financial instruments, foreign currency (losses)/gains, share of associate losses, business combination costs, and other adjustments due to purchase price allocation.)

What else happened during the half year?

Helping drive the strong results lifting the Allkem share price today was record half-year production at the company's Olaroz Lithium Facility in Argentina. Olaroz produced 7,542 tonnes of lithium carbonate, beating its 2019 record by 13%.

This also saw Olaroz deliver record revenue, up roughly 350% to US$296 million.

The ASX 200 lithium share reported that average pricing over the six months increased almost four-fold from H1 FY22 to reach US$43,236 tonne free on board (FOB). The gross profit margin was approximately 90%.

Allkem also saw a 65% year-on-year increase in its spodumene revenue. That reached US$190 million from sales of 36,951 dry metrics tonnes (dmt) of spodumene concentrate.

The company received an average price of US$5,136 per tonne cost, insurance, freight (CIF), with a gross cash margin of 76%.

What did management say?

Commenting on the results helping boost the Allkem share price today, CEO Martin Perez de Solay said:

Amidst strong demand for lithium products, we have delivered first production at the Naraha Lithium Hydroxide Plant and advanced Olaroz Stage 2 to commissioning. Sal de Vida construction is well underway, and James Bay is advancing with approvals received by the federal government for the ESIA.

With two revenue generating operations being supplemented in the near future by Olaroz Stage 2 and a strong balance sheet, we are fully funded to complete construction at Sal de Vida and the development of James Bay.

What's next?

Looking to what might impact the Allkem share price in the months ahead, the company forecasts third-quarter FY23 lithium carbonate prices will be approximately US$53,000 per tonne FOB. It noted that figure excludes Naraha feedstock, an intermediate input for the production of battery-grade lithium hydroxide.

With strong customer demand, Allkem forecasts spodumene prices in the March quarter will come in 5% higher than for the December quarter.

"Allkem remains focused on continuing successes of our business, optimising operations and delivering its tier 1 development assets while also advancing the next wave of growth," Perez de Solay said.

Allkem share price snapshot

As you can see on the chart below, the Allkem share price has gained an impressive 33% over the past 12 months.

The post Allkem share price in the green as ASX 200 lithium stock posts record revenue appeared first on The Motley Fool Australia.

The excitement of reporting season is nearly behind us. It is now the last few stragglers left to post their financials. This means a much quieter day for ASX shares reporting today compared to yesterday.

Nevertheless, there are still some important names in the lineup that are worth checking out. Each report could be a window of opportunity into the next investment. There can be incredible insights to glean from earnings season, so let's make the most of it.

To help you on your merry way, here is a quick summary of today.

These ASX shares are releasing their results today

Ranked in order of market capitalisation (largest to smallest)

Accent Group Ltd (ASX: AX1), $1.2 billion

Allkem Ltd (ASX: AKE), $7.3 billion

Block Inc CDI (ASX: SQ2), $64.2 billion

Brambles Limited (ASX: BXB), $16.8 billion

Jumbo Interactive Ltd (ASX: JIN), $917.4 million

Mayne Pharma Group (ASX: MYX), $262.5 million

Mineral Resources Ltd (ASX: MIN), $16.2 billion

Perpetual Ltd (ASX PPT), $2.9 billion

What can we expect to see?

It's time for another ASX buy now, pay later (BNPL) share to do the walk around the block. Afterpay acquirer, Block Inc CDI (ASX: SQ2), is set to post its fourth quarter and full-year earnings for FY2022 today.

Although, Aussie investors can already get a glimpse of the fintech giant's numbers due to its US parent company already publishing the details earlier this morning.

By the looks, Block had a fairly solid performance in Q4. Total net revenue increased 14% year on year to US$4.65 billion and gross profits jumped 40% to US$1.66 billion. Furthermore, it appears the company's BNPL segment assisted in boosting gross profit growth given Block's comparables excluding this segment weren't as strong.

However, like Zip Co Ltd (ASX: ZIP), Block reported steepening losses for the quarter and the full year. In Q4, net losses reached US$114 million compared to US$77 million a year prior.

A completely different ASX share that will be grabbing some attention today is lithium producer, Allkem.

The price of lithium began a swift move downwards from mid-November through to the end of the financial period. As such, shareholders will be nervously awaiting clarity on the extent of the impact of weakening lithium prices.

Earlier in the week, I covered the rumblings among analysts on the deteriorating lithium outlook. Fortunately, Allkem's guidance could shed some light on the expected supply and demand dynamics.

The Allkem share price is now only slightly higher in 2023. On 30 January, shareholders were sitting on a tidy return of 27%, which has since largely disappeared.

Don't forget to check back in throughout the day for our earnings coverage.

The post Earnings preview: Here are the ASX shares reporting on Friday appeared first on The Motley Fool Australia.