Allkem’s investor day provided a few takeaways for Citi: the company expects to maintain 10% market share; nominated growth should be funded by stronger cash generation as will the unlocking of value from undeveloped assets; and the company considers vertical integration and flexibility of grades as key differentiators.
The company confirmed expectations of a Stage 2/3 at Sal de Vida and provided a five-year capital expenditure and production outlook.
Citi believes Allkem can outperform peers if it capitalises on its learnings from Olaroz and expects another six months of strong prices.
Buy rating retained. Target price rises to $15.50 from $14.
Sector: 0.
Target price is $15.50.Current Price is $13.42. Difference: $2.08 – (brackets indicate current price is over target). If AKE meets the Citi target it will return approximately 13% (excluding dividends, fees and charges – negative figures indicate an expected loss).
