Australia's Allkem Q4 update shows upside valuation potential of assets - Jefferies

Allkem

28/07/2023 03:02

(Updates with Macquarie, Canaccord Genuity comments, share
move)
    ** Jefferies says lithium miner Allkem's  AKE.AX 
operational performance at both Olaroz and Mt Cattlin projects
exceeded its expectations during the quarter
    ** Allkem's Q4 revenue eased as weak lithium prices offset
higher output at Mt Cattlin project, while its Olaroz Stage 2
lithium facility achieved first wet production in mid-July
    ** Jefferies says Q4 update demonstrated upside valuation
potential of the two assets
    ** Brokerage says continuation of strong results in Sept.
quarter may support contingency of shareholders wanting a bigger
share for Allkem in the merger with U.S-based Livent  LTHM.N  
    ** Canaccord Genuity says Olaroz Q4 production was higher
than its forecast 
        ** Expects substantial capacity growth for AKE in FY24
on the back of ramp-up of Olaroz II and production recovery at
Mt Cattlin
        ** Morgan Stanley says Q4 sales volume was lower than
estimates; cuts price target on co stock to A$19.00 from
A$19.10, taking into account co's weak earnings outlook 
    ** Allkem shares down as much as 2.4% to A$14.96
    ** As of last close, stock up 36.3% YTD

    

 (Reporting by Himanshi Akhand and Poonam Behura in Bengaluru)
 ((Himanshi.Akhand@thomsonreuters.com;))