Allkem (ASX: AKE)

Last close As at 18/06/2024

AUD9.83

0.00 (0.00%)

Market capitalisation

AUD5,850m

Created as part of a merger between Orocobre and Galaxy Resources in 2021, Allkem is a speciality lithium chemicals company headquartered in Argentina.

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Allkem — Moving up the value chain

Equity Analyst

Andrey Litvin

Energy and Resources Analyst

Share Price Performance

Price Performance
% 1M 3M 12M
Actual 5.8 (15.5) (17.0)
Relative (0.2) (20.6) (21.6)
52 week high/low A$16.7/A$8.3

Financials

Allkem is uniquely positioned to be one of the main beneficiaries of the favourable lithium market conditions as it boasts a healthy pipeline of advanced development projects, aiming to triple its production capacity and to expand into the higher value battery-grade products. Despite near-term economic weakness, lithium demand continues to be driven by the secular trend towards decarbonisation and growing global electric vehicle (EV) adoption. Supported by supply shortages, cost inflation and project delays, lithium prices should remain at elevated levels to incentivise new supply. Despite adding c 45% year to date, Allkem shares trade at a FY23e consensus EV/EBITDA multiple of only 5.6x versus the downstream peers’ average of 9.6x.

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