29Metals (29M) shares rose more than 7% to about $AU1.94 in afternoon trading on September 9, as forecasts predict a rising demand for copper.
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The mining company produces copper and an array of other metals, including gold, silver, and zinc. The stock’s increase comes amid a bullish outlook for the copper market.
The shift to clean energy is fuelling demand for copper. The metal is used in the wiring of electric vehicles. It’s also used in wind and solar energy production systems. Moreover, copper underpins the transport and storage infrastructure of renewable energy. A copper shortage may occur in the coming years, as demand outstrips supply, according to reports from Bloomberg and the S&P Global.
The energy shift is also fuelling demand for lithium, which is why Global Lithium Resources (GL1) shares have also been surging. Lithium is a major material in battery manufacturing. Many electric cars run on lithium-based batteries. Moreover, lithium batteries are also used to storage energy from intermittent renewable energy resources such as wind and solar.
Strong copper demand may boost 29Metals’ financial results
Strong copper demand may result in higher revenue and profit for 29Metals. The company reported a 23% rise in revenue for the 2022 half year, to $AU356 million.
29Metals’ net profit after tax for the period hit $AU0.4 million, compared to a loss of $AU13 million previously. The company plans to distribute an interim dividend of $AU0.02 per share on October 14.
29Metals’ share price forecast
Although 29Metals shares remain down about 45% from the beginning of 2022, analysts are bullish. According to TipRanks’ analyst rating consensus, 29M stock is a Moderate Buy based on three Buys, two Holds, and one Sell. The average 29Metals stock forecast of $2.02 implies about 4% upside potential.
29Metals stock is receiving favourable mentions on financial blogs. TipRanks data shows that financial blogger opinions are 90% Bullish on 29M, compared to a sector average of 75%.
Final thoughts
The global transition to clean energy promises to ensure strong demand for copper, and 29Metals is among the Australian miners well-positioned to capitalise on the opportunity. However, it may take some time before 29M shares recover to their high at the start of the year, considering recession concerns have resulted in reduced gains across the market.
