10 Cheap Lithium Stocks To Buy According To Analysts

In this article, we discuss 10 cheap lithium stocks to buy according to analysts.

The global lithium market was worth $7.1 billion in 2021, and it is forecasted to be valued at $15.45 billion by 2028, at a compound annual growth rate of 11.75% over the forecast period from 2022 to 2028. The market for lithium is growing globally due to its use in the production of batteries, solar panels, and chemicals. The Lithium Industry Association predicts that the demand for lithium will increase from 292,000 metric tons in 2020 to 2.5 million metric tons by 2030. This is primarily driven by the growing use of lithium-ion batteries in electronics and vehicles. The demand for the lithium market has grown dramatically, increasing by 3000% since 2010. The Asia-Pacific region is the primary market for the consumption of lithium, mainly due to the high demand from countries like China, South Korea, and Japan.

China is expected to have a production capacity of 1,811 GWh of lithium cells by 2025 as per the National Blueprint for Lithium Batteries. Being the largest market for electric vehicles and the leader in the production of lithium-ion batteries, including the processing of minerals and raw materials, China plays a crucial role in the lithium market.

While between 8% and 9% of all cars sold around the globe in 2022 were totally battery electric, it was a slight increase from 2021. Predictions for the percentage of electric vehicles in new car sales in 2030 vary from around 30% to 45%. These 2030 estimates include both fully electric cars and plug-in hybrid vehicles, which have small lithium-ion battery packs and electric motors in addition to traditional gasoline engines. Analyst Stephen Richardson of Evercore ISI predicts that the price of lithium carbonate will be around $30,000 per metric ton by 2030.

Investors can also check out Lithium Stocks List: 15 Biggest Companies, 12 Countries That Produce the Most Lithium, and 11 Best Battery Stocks To Buy Now. Some of the best lithium stocks to buy include Sigma Lithium Corporation (NASDAQ:SGML), FREYR Battery (NYSE:FREY), and Lithium Americas Corp. (NYSE:LAC). 

Our Methodology 

We scoured the lithium industry and first listed down at least 30 stocks trading on US stock exchanges. We then found these stocks’ average price targets placed by Wall Street analysts and investment firms. We narrowed down to 12 stocks with the most upside potential based on their current share price and their average price targets. The list is ranked in ascending order of the upside potential of these stocks.

Photo by Kumpan Electric on Unsplash

Cheap Lithium Stocks To Buy According To Analysts

10. Johnson Controls International plc (NYSE:JCI)

Number of Hedge Fund Holders: 37

Upside Potential as of January 27: 4.68%

Average Price Target Based on Analyst Ratings: $72.07

Johnson Controls International plc (NYSE:JCI) offers engineering, manufacturing, commissioning, and retrofitting services for building products and systems in the United States, Europe, the Asia Pacific, and other international locations. It is divided into four divisions – Building Solutions North America, Building Solutions EMEA/LA, Building Solutions Asia Pacific, and Global Products. On January 13, Johnson Controls International plc (NYSE:JCI) announced that it has acquired Hybrid Energy AS, a provider of high-temperature energy management solutions specializing in heat pumps for district heating and industrial processes. This acquisition will allow Johnson Controls International plc (NYSE:JCI) to offer high-temperature heat pumps in the expanding district heating and industrial markets, particularly in Europe.

On January 13, Mizuho analyst Brett Linzey raised the firm’s price target on Johnson Controls International plc (NYSE:JCI) to $78 from $72 and maintained a Buy rating on the shares. Despite ongoing macroeconomic warning signals, the analyst remains optimistic about the short-term fundamentals of the industrial technology sector and expects Q4 earnings to be in line. The analyst cited strong backlogs for 2023 and positive factors such as pricing, factory continuity, reduced supply chain disruptions, and capital deployment as reasons for this optimism.

According to Insider Monkey’s third quarter database, 37 hedge funds were long Johnson Controls International plc (NYSE:JCI), compared to 33 funds in the prior quarter. Ken Griffin’s Citadel Investment Group is the largest stakeholder of the company, with 7.3 million shares worth $363.5 million. 

Like Sigma Lithium Corporation (NASDAQ:SGML), FREYR Battery (NYSE:FREY), and Lithium Americas Corp. (NYSE:LAC), Johnson Controls International plc (NYSE:JCI) is one of the best battery stocks to invest in. 

Here is what Aristotle Capital Management Value Equity has to say about Johnson Controls International plc (NYSE:JCI) in its Q1 2022 investor letter:

“As investors since the fourth quarter of 2017, we have enjoyed a front-row view of the large transformation that has taken place at Johnson Controls. Once a multi-industrial corporation, the company successfully turned itself into a pure-play buildings solutions and technology provider. Catalysts we previously identified for Johnson Controls included synergies following its merger with Tyco International, which provides fire safety and building security products, as well as benefits from its separation of non-building-focused businesses, such as automotive seating and batteries. With all catalysts in sight now nearing completion, and Johnson Controls now a better business for it – with higher recurring revenues and lower capital intensity – we decided to exit our investment to help fund the purchases of Xcel Energy and Atmos Energy.”

9. EnerSys (NYSE:ENS)

Number of Hedge Fund Holders: 18

Upside Potential as of January 27: 6.00%

Average Price Target Based on Analyst Ratings: $85.00

EnerSys (NYSE:ENS) is a Pennsylvania-based company that provides stored energy solutions for industrial applications worldwide. It operates in three segments – Energy Systems, Motive Power, and Specialty. EnerSys (NYSE:ENS) specializes in advanced lithium ion technology for heavy-duty operations and battery applications. EnerSys (NYSE:ENS) is one of the best battery stocks to invest in. 

On May 27, Oppenheimer analyst Noah Kaye maintained an Outperform rating on EnerSys (NYSE:ENS) but lowered the firm’s price target on the shares to $80 from $88.

According to Insider Monkey’s data, 18 hedge funds were bullish on EnerSys (NYSE:ENS) at the end of the third quarter of 2022, with collective stakes worth $251.2 million, compared to 20 funds in the prior quarter worth $222.8 million. Matt Sirovich and Jeremy Mindich’s Scopia Capital is the largest position holder in the company, with 1.5 million shares worth $86.6 million. 

Here is what Harding Loevner Global Small Companies Equity Fund has to say about EnerSys (NYSE:ENS) in its Q3 2021 investor letter:

“EnerSys, a leader in the global industrial battery and stored energy solutions market, was the largest detractor in Industrials as increased investments in growth opportunities pressured its margins. One of its projects is a next-generation lithium battery that is compact and lightweight enough to be used as the backup power source for small-gauge cellular equipment, the kind that is vital to fifth-generation (5G) rollouts. Another project is an electric vehicle (EV) charging initiative, where the company is applying its industry-leading forklift charging technology to fast-charging infrastructure for commercial and residential buildings.”

8. FMC Corporation (NYSE:FMC)

Number of Hedge Fund Holders: 28

Upside Potential as of January 27: 7.06%

Average Price Target Based on Analyst Ratings: $141.56

FMC Corporation (NYSE:FMC) was founded in 1883 and is headquartered in Philadelphia, Pennsylvania. It is an agricultural sciences company that provides crop protection, plant health, and professional pest and turf management products. In 2014, FMC Corporation (NYSE:FMC) announced that they had acquired Cheminova, a multinational company that specializes in crop protection. This acquisition is in line with FMC’s overall strategy of focusing on the agriculture, health, nutrition, and lithium technology markets.

On January 20, Citi analyst P.J. Juvekar raised the firm’s price target on FMC Corporation (NYSE:FMC) to $148 from $138 and kept a Buy rating on the shares. The analyst does not believe that the agriculture industry is reaching a peak, due to farmers still being in good condition. However, he does think that the risk-to-reward ratio for the industry as a whole is not as favorable now compared to a year ago. The analyst also stated that among companies in the North American fertilizers and agricultural chemicals industry, he prefers those that focus on seed and agricultural chemicals over fertilizers.

According to Insider Monkey’s data, 28 hedge funds were long FMC Corporation (NYSE:FMC) at the end of the third quarter of 2022, compared to 29 funds in the last quarter. Larry Robbins’ Glenview Capital is a significant stakeholder of the company, with 817,353 shares worth $86.4 million. 

TimesSquare Capital made the following comment about FMC Corporation (NYSE:FMC) in its Q3 2022 investor letter:

“FMC Corporation (NYSE:FMC) is an agricultural sciences company offering solutions in areas such as crop protection, plant health, professional pest, and turf management. The company reported mixed results with an upside to revenues though with declining margins on cost headwinds. While the stock pulled back by -1%, we used this weakness as an opportunity to increase the position.”

7. Albemarle Corporation (NYSE:ALB)

Number of Hedge Fund Holders: 49

Upside Potential as of January 27: 9.31%

Average Price Target Based on Analyst Ratings: $307.94

Albemarle Corporation (NYSE:ALB) is a North Carolina-based company that develops, manufactures, and markets engineered specialty chemicals worldwide. It operates through three segments – Lithium, Bromine, and Catalysts. The Lithium segment provides lithium compounds, including lithium carbonate, lithium hydroxide, lithium chloride, and lithium specialties. Albemarle Corporation (NYSE:ALB) is one of the best battery stocks to monitor. 

On January 24, Albemarle Corporation (NYSE:ALB) forecasted that its annual adjusted EBITDA will nearly double to between $7.2 billion and $8.4 billion by 2027, compared to a preliminary estimate of $3.4 billion to $3.5 billion in 2022. This prediction is based on preliminary results, which include better-than-expected Q4 adjusted earnings per share of $8.35 to $8.75.

Piper Sandler analyst Charles Neivert on January 26 initiated coverage of Albemarle Corporation (NYSE:ALB) with an Overweight rating and a $310 price target. The analyst believes that Albemarle Corporation (NYSE:ALB) is shifting from a cyclical to a growth-oriented company and therefore deserves a valuation that is more in line with its historical performance. He also noted that Albemarle is mainly focused on lithium and that this represents a large portion of its overall earnings and the majority of its potential for growth.

According to Insider Monkey’s data, Albemarle Corporation (NYSE:ALB) was part of 49 hedge fund portfolios as of the end of the third quarter of 2022, up from 39 in the prior quarter. Israel Englander’s Millennium Management is the largest stakeholder of the company, with 603,396 shares worth $159.5 million. 

Carillon Tower Advisors made the following comment about Albemarle Corporation (NYSE:ALB) in its Q4 2022 investor letter:

“Albemarle Corporation (NYSE:ALB) is a global specialty chemicals company with leading positions in lithium, bromine, and refining catalysts. The stock gave back some of its recent gains amid investor concerns about how the future price of lithium could be affected by a potential decelerating rate of growth in overall electric vehicle (EV) production and demand, primarily in China. Despite these potential near-term headwinds, longer-term the global lithium market remains tight, and Albemarle plays a critical role in the battery value chain and remains well-positioned for the overall continued global adoption of EVs.”

6. Livent Corporation (NYSE:LTHM)

Number of Hedge Fund Holders: 31

Upside Potential as of January 27: 16.39%

Average Price Target Based on Analyst Ratings: $30.33

Livent Corporation (NYSE:LTHM) is a Pennsylvania-based company that manufactures and markets performance lithium compounds used in lithium-based batteries, specialty polymers, and chemical synthesis applications in North America, Latin America, Europe, the Middle East, Africa, and the Asia Pacific. On January 4, Vertical Research analyst Kevin McCarthy upgraded Livent Corporation (NYSE:LTHM) to Buy from Hold with a $30 price target, noting that the pullback in shares provides a “bigger cushion.” Similarly, BofA analyst Matthew DeYoe upgraded Livent Corporation (NYSE:LTHM) to Buy from Underperform with a $26 price target on January 11. 

According to Insider Monkey’s data, 31 hedge funds were long Livent Corporation (NYSE:LTHM) at the end of September 2022, compared to 30 funds in the prior quarter. Robert Karr’s Joho Capital is a significant position holder in the company, with approximately 3 million shares worth $91.3 million. 

In addition to Sigma Lithium Corporation (NASDAQ:SGML), FREYR Battery (NYSE:FREY), and Lithium Americas Corp. (NYSE:LAC), Livent Corporation (NYSE:LTHM) is one of the premier battery stocks to monitor. 

Carillon Tower Advisers made the following comment about Livent Corporation (NYSE:LTHM) in its Q3 2022 investor letter:

“Livent Corporation (NYSE:LTHM) also performed well during the quarter. There is increased enthusiasm among investors towards lithium producers driven by rapid electric vehicle adoption on a global scale. There is greater appreciation for the significant barriers to entry for lithium, and as a result lithium commodity pricing has remained robust, contrary to the weakening commodity prices for other metals.”

5. Sigma Lithium Corporation (NASDAQ:SGML)

Number of Hedge Fund Holders: 8

Upside Potential as of January 27: 47.41%

Average Price Target Based on Analyst Ratings: $45.24

Sigma Lithium Corporation (NASDAQ:SGML) is a Canadian mineral development company engaged in the exploration and development of lithium deposits in Brazil. It is one of the best battery stocks to monitor. On December 5, Sigma Lithium Corporation (NASDAQ:SGML) announced that it aims to nearly triple its planned production of battery grade lithium concentrate to approximately 100,000 metric tons per year of lithium carbonate equivalent by 2024 following results from a study at its Grota do Cirilo project in Brazil. 

On January 19, BMO Capital analyst Joel Jackson initiated coverage of Sigma Lithium Corporation (NASDAQ:SGML) with an Outperform rating and a $40 price target. The stock has already performed well due to increasing interest in electric vehicles, but the analyst believes there is still potential for growth as Sigma becomes a larger producer by the middle of 2023 and becomes a more appealing acquisition target.

According to Insider Monkey’s Q3 data, 8 hedge funds were long Sigma Lithium Corporation (NASDAQ:SGML), compared to 3 funds in the prior quarter. Jack Ripsteen’s Potrero Capital Research is the largest stakeholder of the company, with 596,930 shares worth $16.2 million. 

4. Lithium Americas Corp. (NYSE:LAC)

Number of Hedge Fund Holders: 14

Upside Potential as of January 27: 61.18%

Average Price Target Based on Analyst Ratings: $35.75

Lithium Americas Corp. (NYSE:LAC) was incorporated in 2007 and is headquartered in Vancouver, Canada. It is a resource company that explores for lithium deposits. On December 20, Lithium Americas Corp. (NYSE:LAC) announced that it would acquire Arena Minerals for an implied equity value of $227 million, in a move to enhance its presence in the Pastos Grandes basin in Argentina. It is one of the best battery stocks to consider. 

On January 16, National Bank analyst Lola Aganga maintained an Outperform rating on Lithium Americas Corp. (NYSE:LAC) but lowered the firm’s price target on the shares to $38.50 from $42.50. The new target reflects updated commodity price estimates, but Lithium Americas Corp. (NYSE:LAC) is still considered a top choice as it is fully financed and set to become a near-term producer of lithium. It is also progressing with the largest new brine operation in the last decade and is on track to begin production in the first half of 2023, the analyst told investors. 

According to Insider Monkey’s data, 14 hedge funds were bullish on Lithium Americas Corp. (NYSE:LAC) at the end of September 2022, up from 9 funds in the last quarter. Jay Chen’s Himension Capital is the biggest stakeholder of the company, with 3.26 million shares worth $85.6 million. 

Here is what Massif Capital has to say about Lithium Americas Corp. (NYSE:LAC) in their Q1 2021 investor letter:

“Lithium Americas: The volatility noted above in LAC has resulted in solid returns via our options trades around our core equity position. At the current time, we are short calls on LAC, as we have done multiple times throughout the position’s life, expiring on May 21, 2021, at a $17.5 and $22.5 strike price. The volume of contracts sold at each strike corresponds to the size of the equity position we want should the calls expire in the money, and the underlying equity gets called away from us. The thought process behind this trade construction is that if we know the size of the position we want at a particular price point, there is no reason not to accumulate additional returns by pre-selling the stock we would have sold anyway.

High levels of volatility positively impact the price of options, increasing the premium we can earn from selling covered calls. To date, we have sold covered calls on LAC that have expired worthless four times, yielding a roughly 7% return on the equity position’s current value of 71 bps for the portfolio overall. The outstanding covered calls appear to be trending towards a similar worthless expiration. If they do, the covered call trades on LAC will result in us owning the shares with committed capital of -$0.28 per share.

Although we believe in the fullness of time LAC warrants a $30+ valuation, the prices achieved in early January of this year were not justified by the underlying fundamentals. Some will argue we should have sold down our position. We had already established our option positions and believe LAC is an emerging major in the lithium mining industry. Thus, we decided to maintain the position unchanged. Although still relatively high, the current $15 per share valuation is not crazy compared to where we think the firm should be trading based on fundamentals, so we are no longer overly concerned with the position as is.

LAC management also took advantage of the volatility issuing stock on January 22 for $22 a share. The ~$400 million in proceeds will be used to develop Thacker Pass, the US-based clay lithium deposit, which will likely be the largest producing Lithium mine in America when turned on. In our opinion, the stock issuance could not have come at a better time. LAC management has advanced the project through various development stages (de-risking), but with the share issuance, they have significantly reduced the need to bring in an outside partner to develop the asset as the first phase of the project is expected to cost roughly $581 million. After-tax and at an 8% discount rate, the Thacker Pass project’s present value is approximately $2.6 billion (the firm’s current market capitalization is $1.5 billion). Although the share issuance was dilutive, increasing the total shares by 17%, we believe it will, in the long run, prove a forward-looking, value-additive decision by management.

The lithium market remains an area of interest and focus for us. This reflects our belief that the most exciting investment opportunities to capture secular trends in EV’s and batteries are found upstream in the mining industry. It is also a reflection that there is a greater diversity of lithium investment opportunities relative to other battery metals.”

3. Piedmont Lithium Inc. (NASDAQ:PLL)

Number of Hedge Fund Holders: 12

Upside Potential as of January 27: 64.08%

Average Price Target Based on Analyst Ratings: $109.67

Piedmont Lithium Inc. (NASDAQ:PLL) is a North Carolina-based exploration stage company, engaged in the exploration and development of resource projects in the United States, specializing in the lithium business. Piedmont Lithium Inc. (NASDAQ:PLL) is one of the best battery stocks to invest in. On January 3, Piedmont Lithium Inc. (NASDAQ:PLL) stock surged 7.9% after the company amended its deal to supply spodumene concentrate to Tesla, Inc. (NASDAQ:TSLA) through the end of 2025, with an option to renew for an additional three years. 

On December 2, DA Davidson analyst Matt Summerville raised the price target on Piedmont Lithium Inc. (NASDAQ:PLL) to $90 from $85 and kept a Buy rating on the shares. The analyst noted the recent developments across the company’s global lithium assets, including a $142 million DoE grant for Tennessee Lithium. The analyst also sees an “illogical valuation gap” between Piedmont Lithium Inc. (NASDAQ:PLL)’s market value and the earnings power of its Sayona offtake and associated 25% ownership of NAL.

According to Insider Monkey’s data, 12 hedge funds were bullish on Piedmont Lithium Inc. (NASDAQ:PLL) at the end of September 2022, compared to 11 funds in the prior quarter. 

2. FREYR Battery (NYSE:FREY)

Number of Hedge Fund Holders: 22

Upside Potential as of January 27: 116.26%

Average Price Target Based on Analyst Ratings: $18.75

FREYR Battery (NYSE:FREY) focuses on the production of battery cells for stationary energy storage, electric mobility, and marine applications in Europe and internationally. The company designs and manufactures lithium-ion based battery cell facilities. It is one of the best battery stocks to buy according to analysts. On January 12, FREYR Battery (NYSE:FREY) stock gained over 6% after the company signed its first e-mobility offtake agreement. Freyr will supply 10 – 14 GWh of battery cells to Impact Clean Power Technology from 2025 to 2030. 

On January 12, Goldman Sachs analyst Philipp Konig assigned a Buy rating and a $19 price target to FREYR Battery (NYSE:FREY). The company’s first commercial offtake agreement with Impact Clean Power Technology marks its first deal with a player in the mobility space and supports his bullish thesis on the stock, the analyst wrote in a research note.

According to Insider Monkey’s Q3 data, 22 hedge funds were long FREYR Battery (NYSE:FREY), compared to 16 funds in the last quarter. Daniel Patrick Gibson’s Sylebra Capital Management is the largest stakeholder of the company, with 12.80 million shares worth $182.2 million. 

1. Enovix Corporation (NASDAQ:ENVX)

Number of Hedge Fund Holders: 30

Upside Potential as of January 27: 162.78%

Average Price Target Based on Analyst Ratings: $21.39

Enovix Corporation (NASDAQ:ENVX) was founded in 2007 and is headquartered in Fremont, California. The company designs, develops, and manufactures silicon-anode lithium-ion batteries. Enovix Corporation (NASDAQ:ENVX) is one of the best battery stocks to monitor. 

On January 26, JPMorgan analyst Bill Peterson maintained an Overweight rating on Enovix Corporation (NASDAQ:ENVX) but lowered the firm’s price target on the shares to $16 from $28. The analyst believes that institutional investor sentiment in the transportation and fuel transformation industry is currently negative or muted. Due to macro volatility and concerns of a recession, investor expectations may remain low in the short term. However, he predicts that if interest rates stabilize, there could be a recovery in the latter half of the year. 

According to Insider Monkey’s data, Enovix Corporation (NASDAQ:ENVX) was part of 30 hedge fund portfolios at the end of the third quarter of 2022, compared to 23 funds in the last quarter. Peter S. Park’s Park West Asset Management is the largest stakeholder of the company, with more than 9 million shares worth $166.7 million.

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Disclosure: None. 10 Cheap Lithium Stocks To Buy According To Analysts is originally published on Insider Monkey.