Two months ago, several lithium producers reported that they may not be able to produce enough lithium to meet the upcoming huge demand from electric car makers. Usually that’s a great situation. This means that you can sell any goods or services that your company offers. Even more promising shows that huge demand and limited supply can lead to huge profits when prices rise. This is enough for many investors to consider lithium the best investment opportunity.
especially, Albemarle (New York Stock Exchange:ALB) forecast that supply and demand for the metal will remain “tight” for the remainder of the year, while lithium prices will recover. at the end of July, Exxon (New York Stock Exchange:XOM) CEO Darren Woods reported that the oil giant is considering entering the lithium space, adding that XOM was impressed with the overview of the space.
Considering all these points, I believe the lithium sector will be very lucrative in the medium term. As a result, I believe many investors will greatly benefit from purchasing these three potentially high-potential lithium stocks.
Albemarle (New York Stock Exchange:ALB) reported very strong second quarter results earlier this month. Specifically, net income of $650 million was significantly higher than the net income of $406.8 million earned in the second quarter of 2022.
In addition, the company raised its full-year earnings per share forecast to $25 to $29.50 from its previous forecast of $20.75 to $25.75. In fact, ALB forecasts that lithium sales volume will grow at a compound annual growth rate of 20%-30% from 2023 to 2027.
Investor’s Business Daily Giving ALB stock a very high EPS rating of 98, the company received an ‘A’ from: IBD Based on metrics that measure sales growth, profit margins and return on equity.
ALB stock has an 8x future price/earnings ratio, which is very attractive.
square meter (square meter)
In the first six months of the year, the Chile-based lithium mining company’s net profit was Square meter (New York Stock Exchange: Square meter) decreased to $1.33 billion from $1.65 billion a year ago. At the time, the company blamed falling lithium prices during the period for lower profits.
However, the mining company expects to sell more lithium in the second half of the year than in the first half. Fundamentals in the global lithium sector remain strong, he said.
Backing up the latter claim, SQM announced in July a new six-year, massive lithium supply deal with the South Korean battery giant. LG Energy. Additionally, SQM reported in May that it had signed a lithium supply contract. ford motor (New York Stock Exchange:F.).
SQM has a very low expected price/earnings ratio of 7, making it one of the lithium stocks with the most potential.
Last quarter, the net profit of lithium miners revent (New York Stock Exchange:LTHM) increased 50% year-over-year to $90.2 million, and revenue increased 8% year-over-year to $235.8 million.
Impressively, if Rivent achieves the midpoint of its guidance range for the full year, revenue would increase by 32% and EBITDA excluding certain items would increase by 54%.
In May, Rivent agreed to merge with an Australian lithium mining company alchemy (OTCMKTS:Oro CF). As a result, the combined companies will save approximately $125 million in annual costs, plus he expects to save $200 million in “temporary capital savings.”
Also importantly, in addition to benefiting from the large amount of lithium produced by Alkem, Livent is building several other significant lithium mines, including facilities in Argentina, North Carolina and China. is.
LTHM has a future price/earnings ratio of 10, which is very attractive.
As of the date of publication, Larry Reimer did not hold any positions (directly or indirectly) in the securities referenced in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com Publishing Guidelines.