Three essential actions for the next increase in lithium

The world once ran on coal and other types of fuels that powered the various titans of industry. This cycle began with transportation via railroads to the factories and steel mills that formed the backbone of the Industrial Revolution. This led to global economic growth from the 1940s to the 1980s. Today, the information revolution calls on a different source of fuel.

Electric vehicles, high-speed trains and factories that rely on the automated assembly process are made possible by new technological breakthroughs in artificial intelligence and robotics. A vast list of companies realize that they all need two essential components if they wish to expand and remain competitive in today’s evolving world: chips and batteries.

Now you can go chasing current battery stocks or even attempt to spot a potential winner in the electric vehicle industry (where new companies pop up out of nowhere almost every day), or you can take the “shovel” approach to this gold rush considering the best lithium stocks.

You’ll soon understand why people like names Chemical and Mining Society of Chile NYSE: MQ and other similar colleagues Albemarle Corporation NYSE: ALB this could be the right place.

But wait, there’s more

There is a wave of reasonably speculative demand coming from the electric vehicle space, as the names go Tesla Inc. NASDAQ:TSLA and even China’s rising star BYD Company Limited OTCMKTS: BYDDF continue to pump out double-digit sales increases year after year with no signs of slowing down. However, there are more concrete spaces where demand for lithium can also be found.

Analysts at The Goldman Sachs Group Inc. NYSE:GS have expressed their bullish view on the US manufacturing sector, boldly predicting a breakout in that area as the country’s economy begins to heat up again, particularly in anticipation that the Fed will cut interest rates later in the year.

What does this mean for these lithium stocks? Factories do not necessarily run on lithium batteries. However, many rely on energy storage technology which requires lithium as a “battery” to store this energy. So, if Goldman is right, many factories will likely increase demand for lithium.

A more precise and stronger root of the question can be found in something as simple as cell phone use. According to Newzoo, in 2022, the United States was the leader in cellphone usage, where up to 81.6% of the population used one. China, the world’s fastest growing middle class, has a penetration rate of only 68.4%.

And India? The new growing superstar economy has a cell phone penetration rate of only 65.5%. This means that as these nations become wealthier, their populations will likely begin to adopt cell phone use and other battery-dependent technologies. Call the Registry for Lithium Producers!

For those more developed nations that won’t see the hyper-growth in demand for lithium for cell phones, you can be sure of how they are accelerating the adoption of electric vehicle use.

How to choose them

Based on these trends, it shouldn’t be surprising to see how analysts are predicting earnings per share growth for these stocks above and beyond their set bullish price targets.

Having signed an exclusive agreement with BYD, which overtook Tesla to become the world leader in electric vehicle sales, Sociedad Quimica y Minera is now in a solid and unique position to massively expand its financials and future growth prospects.

This may be why analysts boldly see a price target of $69.10 per share, predicting an upside of 58.3% from today’s prices. Supporting the positive scenario is a price discount, which is just a fraction of the all-time high price of $115.80 in 2022. A drop of more than 60% makes this stock a ridiculous bargain.

The same bullish trends can be found in Albemarle stock, as the company reported explosive financial growth in its latest quarterly earnings report. With a sales increase of 31%, $9.6 billion represents a record in the company’s history. These results are driven by 35% volume growth for energy storage products, in line with Goldman’s target.

Analysts expect this stock to grow its earnings per share by as much as 95.7% for the next twelve months, the key driver for a stock price target of $193, requiring a 60% rally from the stock’s current level .

One last noteworthy mention is Lithium Americas Corp. NYSE:LAC; This is an emotional story with a silver lining that could change your life, as long as you have the patience to stick it out in the wild ride. This company does not yet make any revenue; its only promise is to target a lithium reserve in northern Nevada via the “Thacker Pass” project.

Should management announce sudden news of finding a reserve of lithium, analysts are positioning the stock to rally as much as 300.0% from their price target of $17.1. Whatever your wallet demand is today, you can find it in this short list of on-demand lithium traders.

Before you consider BYD, you’ll want to hear this.

MarketBeat tracks daily Wall Street’s highest-rated and best-performing research analysts and the stocks they recommend to their clients. MarketBeat identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market takes hold… and BYD wasn’t on the list.

While BYD currently has a “buy” rating among analysts, top analysts believe these five stocks are better buys.

View the five stocks here