Global lithium resources (ASX:GL1) rise as analysts point to mineral shortages

World lithium resources (GL1) shares rose more than 11% to around $2.07 by late morning before easing in the afternoon.

The lithium producer has two very promising lithium production projects in Western Australia. The company continues to advance work on its projects.

Lithium is a central material in the manufacture of electric vehicle batteries. As a result, the global shift to electric cars is fueling demand for lithium supplies. Strong demand has led to a sharp rise in lithium prices, which bodes well for lithium supply companies like Global Lithium Resources.

GL1 jumps after Morningstar strategist says lithium stocks are undervalued

The rise in GL1 shares followed an overnight comment by Morningstar strategist Dave Sekera, who said demand for lithium will exceed supply for many years. In an interview on Yahoo Finance, Sekera said the lithium market is significantly undersupplied relative to growing demand for electric vehicles.

Sekera expects the lithium supply shortfall to last at least a decade, which will impact long-term prices. As a result, the Morningstar strategist believes lithium producer stocks are currently undervalued.

Global Lithium Resources Stock Price Forecast

Although GL1 shares have already risen around 360% in the last 12 months, they have more room to maneuver. According to TipRanks analyst rating consensus, GL1 stock is a Moderate Buy. The average Global Lithium Resources stock price forecast of AU$2.30 implies more than 16% upside potential.

Global Lithium Resources scores eight out of 10 in TipRanks’ Smart Score rating system, indicating the stock has the potential to outperform market expectations.

Additionally, shares of Global Lithium Resources are receiving favorable mentions on financial blogs. Data from TipRanks shows that financial blogger reviews are 97% bullish on GL1, versus an industry average of 75%.

Final Thoughts

The shift to electric vehicles has been bolstered by supportive government policies around the world. As a result, the electric vehicle market is set to grow rapidly in the coming years. Many investors see lithium supply stocks, such as Global Lithium Resources, as providing alternative exposure to the electric vehicle industry.


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