Sigma Lithium stock price target lowered to $10 by BMO Capital

Investing.com - BMO Capital has lowered its price target on Sigma Lithium Corp. (NASDAQ:SGML) to $10.00 from $12.00 while maintaining an Outperform rating on the stock. The new target still represents significant upside from SGML’s current price of $5.36, with the stock having fallen over 61% in the past year.

The price target reduction reflects BMO’s decreased expectations for near-term sales and production, along with a delayed timeline for the company’s phase 2 expansion project. According to InvestingPro data, SGML appears undervalued with analysts maintaining targets between $7-$12 despite recent challenges. InvestingPro analysis shows 2 analysts have revised earnings downward for the upcoming period.

BMO now projects that the first tonnes from Sigma Lithium’s 250kt phase 2 expansion will arrive in the first half of 2027, pushed back from the previous estimate of Q4 2026.

The research firm noted uncertainty around production rates through Q1 2026, suggesting that rates may not return to normal for several months and might require additional capital expenditure.

BMO analyst Joel Jackson acknowledged recent stock volatility, noting that Sigma Lithium has underperformed during the current lithium rally amid questions regarding the company’s change in mining contractor and balance sheet concerns.

In other recent news, Sigma Lithium Corp reported its second-quarter 2025 earnings, which fell short of analyst expectations. The company posted an earnings per share (EPS) of -$0.17, significantly missing the anticipated -$0.042, while revenue was $16.89 million, falling short of the projected $36.25 million. This earnings miss has raised concerns about the company’s financial health, particularly its liquidity position, as reflected in BofA Securities’ downgrade of the stock from Buy to Neutral. BofA cited low cash balances and high days payable outstanding as key factors for the downgrade, adjusting the price target to $7.00 from $10.00.

In a turn of events, BofA Securities later resumed coverage of Sigma Lithium with a Buy rating, setting a price target of $12.00. This reassessment was based on a revised evaluation of the company’s net asset value, considering factors such as a lower expected EBITDA for the years 2025-2027, delays in Phase 2 and 3 startups, and increased long-term mining costs. These developments highlight the complex financial landscape Sigma Lithium is navigating, with differing analyst perspectives on its future potential.

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