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On Wednesday, BofA Securities made adjustments to its outlook on Sociedad Quimica y Minera (NYSE: SQM), a global supplier of plant nutrients and chemicals. Analysts at BofA Securities revised the price target for SQM stock downward to $36.50 from the previous target of $37.00. Despite this change, they have decided to maintain the Underperform rating on the company’s shares. According to InvestingPro data, SQM is currently trading near its 52-week low of $31.27, with analyst targets ranging from $35 to $80.
The revision follows SQM’s first-quarter financial performance for the year 2025, which did not meet expectations set by BofA Securities. Although SQM’s sales figures were consistent with predictions at $1.04 billion, showing a 4% year-over-year decline, the company witnessed growth in specialty plant nutrition (SPN) and iodine segments. However, this was not enough to counterbalance the decreases seen in the lithium and potash sectors. InvestingPro analysis indicates the company maintains strong financial health with a current ratio of 2.51, suggesting ample liquidity to meet short-term obligations.
SQM’s reported EBITDA of $360 million fell short of BofA Securities’ estimates by 7%, yet it was 5% higher than the consensus from Visible Alpha. All business lines incurred higher costs than BofA had anticipated. Furthermore, the net income for SQM, which came in at $137.5 million, was significantly lower than expected—35% below BofA Securities’ forecast and 14% beneath the consensus.
The analysts at BofA Securities reaffirmed their Underperform rating for SQM, citing the anticipated downcycle in lithium prices and an unappealing valuation. Specifically, they pointed to a forecasted free cash flow (FCF) yield of only 2.5% for the year 2025 as a contributing factor to their stance on the stock.
In other recent news, Sociedad Quimica y Minera de Chile S.A. (SQM) reported its first quarter 2025 earnings, which fell short of analyst expectations, while revenue slightly exceeded forecasts. The company posted adjusted earnings per share of $0.48, missing the consensus estimate of $0.61 by $0.13. However, revenue reached $1.04 billion, surpassing the expected $1.02 billion, although it was down 4.4% from $1.08 billion year-over-year. Notably, SQM achieved record first-quarter lithium sales volumes, increasing approximately 27% year-over-year, driven by strong demand from electric vehicles and energy storage systems. Despite this, CEO Ricardo Ramos mentioned a decline in lithium prices due to oversupply and anticipated lower realized prices in the second quarter of 2025. The company’s iodine business showed strong performance, with steady market growth and high prices attributed to limited global supply. SQM is expanding its production capacity, with the Mount Holland refinery plant expected to deliver its first product soon. The company is also progressing towards a total capacity of 240,000 metric tons of lithium carbonate and 100,000 metric tons of lithium hydroxide in Chile.
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