Despite getting sold off this year, Jefferies sees SQM as an attractively valued play in the commodities space. Analyst Alejandro Demichelis upgraded U.S. shares of the Latin American lithium producer to buy from hold. Demichelis raised his price target by $10.80 to $62.80, now suggesting an upside of 31.9%. “Whilst we remain cautious on lithium prices, we see attractive value emerging in SQM given the reshaping that the company is undergoing,” Demichelis wrote in a Monday note to clients. Demichelis said the market underappreciates SQM’s low-cash cost advantage in the lithium space. The increasing international presence of the business can also bring increased growth that the market is not fully anticipating for the longer term, he said. SQM has performed just about in line with peer Albemarle since the start of 2023. That lack of outperformance can be tied to some uncertainties around a deal to extend a Chilean lithium concession to 2060 instead of 2030, the analyst said. SQM ALB,.SPX 1Y mountain SQM vs. Albemarle and S & P 500 While there is not yet a definitive agreement, Demichelis said the plan can create value for the company once executed. “Clearly none of these elements will change SQM’s near term earnings,” he said. “But we believe that they should put the company on a much stronger competitive footing over the coming years.” SQM shares advanced more than 6% during Monday morning trading. The stock has bucked the market uptrend in 2024, dropping nearly 16% year to date.
