Despite weaker lithium pricing since July, Morgans continues to see value for Allkem, which can still throw-off attractive cash flows at lower pricing levels.

In particular, the analyst highlights how established pure play producers should be able to maintain EBITDA margins above 65%, even in the face of the broker's forecast for an overall fall in 2023 pricing of between -20-30%.

While Pilbara Minerals is preferred among the pure plays, Morgans retains its Add rating and $15.30 target for Allkem. The company is considered a higher risk alternative, but does have a larger growth pipeline than Pilbara Minerals.

Sector: 0.

Target price is $15.30.Current Price is $10.90. Difference: $4.40 - (brackets indicate current price is over target). If AKE meets the Morgans target it will return approximately 29% (excluding dividends, fees and charges - negative figures indicate an expected loss).

© 2023 Acquisdata Pty Ltd., source FN Arena