What is helping the Lake Resources (LKE) stock price rebound?

Despite falling in recent days, shares of the lithium explorer are up 86% in the past 12 months.

Lake Resources (ASX:LKE) was among the best performing stocks on the ASX on Friday, finally reversing price after a tumble over the past few days that saw the lithium explorer lose nearly 50% of its value.

At the time of this writing, the stock was up nearly 18% to 82.5 cents.

Why is LKE stock price rebounding?

Part of Lake Resources’ sharp rises in Friday’s share price can be attributed to renewed confidence in lithium stocks after major brokers reaffirmed their confidence in the sector amid the sharp drop in valuations over the past few months. last weeks.

Macquarie analysts have updated their forecast for lithium prices expecting new supply from emerging spodumene producers will not materialize in significant volumes by 2023, despite continued demand for the product. rapidly increasing in the electric vehicle (EV) market.

Macquarie now expects spodumene prices to peak at US$4,900 per tonne in the September quarter and has duly raised its short to mid-term price forecast by 8% to 13%, with demand potentially offsetting any increase in lithium supply.

This is good news for ASX-listed lithium stocks like Lake Resources.

In fact, even explorer rivals Core Lithium (ASX:CXO) and Pilbara Minerals (ASX:PLS), which have also suffered in recent weeks, were up 4% and 5% respectively on Friday.

Bell Potter analysts have a similarly encouraging outlook for the sector and earlier this week assigned a “Buy” rating to 4 lithium stocks, including Lake Resources.

Comfort

Importantly, Lake’s stock rebound also comes after the company sought to reassure investors late Thursday that it was operating “business as usual” despite the sudden departure of general manager Steve Promnitz.

The market was spooked earlier in the week after Lake Resources made the shocking announcement about the immediate exit of Promnitz, who had led the company since 2016 and had been instrumental in transforming it into a supplier to the global electric vehicle supply chain.

The sentiment worsened after it emerged that Promnitz had sold his entire 10.2 million share stake in the company.

The move came just months after junior lithium explorer signed a major new kidnapping agreement with global auto giant Ford Motor Company (NYSE: F) in April to supply approximately 25,000 tonnes per year of lithium from its flagship Kachi project in Argentina. It had signed a similar deal with Japan’s Hanwa Co Ltd in March.

But Lake clarified Thursday that Promnitz left of his own free will and provided no reason for his sudden departure. It further stated that there is no change in its development plans for Kachi and 3 other lithium projects in Argentina.

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