TSX futures tick up after index logs fresh record high close
Investing.com - Itau BBA has resumed coverage on Sociedad Quimica y Minera (NYSE:SQM), a $12.5 billion market cap lithium producer, with an Outperform rating and a $55.00 price target, according to a research note released Thursday. InvestingPro data shows the company maintains a strong financial health score, with liquid assets significantly exceeding short-term obligations.
The firm acknowledges potential volatility over the next six months due to supply-side developments and recent regulatory disruptions in China’s Jiangxi province, which may concern risk-averse investors. Despite these concerns, SQM has demonstrated resilience with a 20% year-to-date return, and according to InvestingPro’s Fair Value analysis, the stock appears slightly undervalued at current levels.
Despite these short-term challenges, Itau BBA believes pending regulatory measures and investment delays could drive lithium prices higher over the next 12-24 months, maintaining a constructive view on the medium-term lithium market outlook.
The research note highlights SQM’s position as a low-cost operator with flexibility to navigate a prolonged low-price cycle, despite an expected supply surplus in 2025-2026.
Itau BBA identifies the successful approval of the Codelco agreement as a key catalyst for SQM, while noting the company’s potential to diversify operations in the long term, though projects like Andover are likely to be less relevant in the near term.
In other recent news, Sociedad Quimica y Minera de Chile SA ADR B (SQM) reported its second-quarter 2025 earnings, which exceeded expectations. The company achieved earnings per share (EPS) of $0.79, surpassing the forecasted $0.58. Revenue also outperformed projections, reaching $2.08 billion compared to the anticipated $1.08 billion. Despite these strong financial results, the company’s stock experienced a decline amid broader market volatility. Additionally, BofA Securities raised its price target for SQM to $43.50 from $36.50, although it maintained an Underperform rating on the company. The price target increase comes after a notable 28% rally in SQM shares in August. BofA noted a significant shift in investor sentiment within the lithium sector from bearish to bullish. These developments highlight the dynamic market conditions surrounding Sociedad Quimica y Minera.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.