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This report is an updated version of the report published on 17 October 2024 at 1:27 PM AEDT.
Vulcan Energy Resources Limited ASX: VUL)
Vulcan Energy Resources Limited (ASX: VUL) is engaged in geothermal energy and lithium exploration and production, with segments in Germany, other European countries (France and Italy) and Australia.
Recommendation Rationale – SELL at AUD 5.03
VUL Daily Chart
Valuation Methodology: P/B Relative Valuation Approach (FY Dec'25E) (Illustrative)
Given the rising losses, increase in depreciation and amortization costs, risks related to commercialisation and exploration, etc., the company might trade at some discount to its peers. For valuation, few peers including Core Lithium Ltd (ASX: CXO), Piedmont Lithium Inc (ASX: PLL), Sayona Mining Ltd (ASX: SYA), and others have been considered. Considering that the stock has surpassed its R1 level, rally in share price, risks associated, and downside indicated by the valuation, it is prudent to book profits at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the current price of AUD 5.03, at 10:30 AM AEDT as of 17 October 2024.
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Note 1: Past performance is neither an indicator nor a guarantee of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 17 October 2024. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.
Technical Indicators Defined: -
Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.
Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.
Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.
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