Global Lithium Resources (GL1) shares were up more than 11% to about $2.07 in late morning trading, before easing in the afternoon.
The lithium producer has two highly promising lithium production projects in Western Australia. The company is continuing to advance work on its projects.
Lithium is a central material in the manufacturing of electric vehicle batteries. As a result, the global shift to electric cars is fuelling demand for lithium supplies. The strong demand has led to a sharp increase 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 stock followed an overnight comment by Morningstar’s strategist Dave Sekera, who said lithium demand is going to outstrip supply for many years. In an interview on Yahoo Finance, Sekera said the lithium market is significantly undersupplied in relation to the surging EV demand.
Sekera predicts the shortfall in lithium supply will endure for at least a decade, impacting prices over the long term. As a result, the Morningstar strategist believes that lithium producer stocks are currently undervalued.
Global Lithium Resources stock price forecast
Although GL1 shares are already up about 360% over the past 12 months, they have more room to run. 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 over 16% upside potential.
Global Lithium Resources scores an eight out of 10 from TipRanks’ Smart Score rating system, indicating that the stock has potential to outperform market expectations.
Moreover, Global Lithium Resources stock is seeing favorable mentions on financial blogs. TipRanks data shows that financial blogger opinions are 97% Bullish on GL1, compared to a sector average of 75%.
The shift to electric vehicles has been bolstered by favourable government polices around the world. As a result, the EV market is poised to grow rapidly in the coming years. Many investors see lithium supply stocks, such as Global Lithium Resources, delivering alternative exposure to the EV industry.