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Investing.com - BofA Securities has resumed coverage on Sigma Lithium Corp. (NASDAQ:SGML), currently trading at $6.15 with a market cap of $712.4 million, with a Buy rating and a $12.00 price target, representing a potential 95% upside from current share price levels. According to InvestingPro data, the stock has experienced significant volatility, trading between $4.25 and $15.55 over the past 52 weeks.
The resumption of coverage follows BofA’s reassessment of Sigma Lithium’s net asset value using a 12% weighted average cost of capital, which incorporates lower expected EBITDA for 2025-2027, delayed Phase 2 and 3 startups, and higher long-term mining costs due to increased strip ratios. While the company is not currently profitable, InvestingPro analysis indicates analysts expect profitability in 2025.
BofA’s analysis assumes that spodumene market pricing has reached its bottom and will steadily improve throughout the second half of the year, though the firm acknowledges its price target remains sensitive to spodumene market conditions.
The bank cites several factors supporting its recovery thesis, including recent production cuts by CATL, upcoming September 30 mining permit deadlines for additional lepidolite producers, and China’s anti-involution initiatives.
BofA notes that if spodumene prices don’t recover until 2028, the effect on its net asset valuation would be significant, though the stock would still remain in Buy territory under that scenario.
In other recent news, Sigma Lithium Corp reported its Q2 2025 earnings, which fell short of expectations. The company announced an earnings per share (EPS) of -$0.17, significantly missing the anticipated -$0.042. This represents a 304.76% negative surprise for investors. Additionally, Sigma Lithium’s revenue was $16.89 million, which is 53.41% below the forecast of $36.25 million. Despite these results, the stock saw a modest premarket increase. These developments highlight the company’s challenges in meeting financial forecasts. Investors and analysts will likely be closely monitoring Sigma Lithium’s upcoming performance.
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