Lithium stocks face uncertainty after price slump, but analyst bullish on certain companies.

From Morningstar:

Lithium stocks face uncertainty in 2024 after a 2023 price slump due to oversupply. Analyst Seth Goldstein is bullish on Albermarle and Lithium Americas. Undervalued stocks include Lithium Americas, Arcadium Lithium, Ganfeng Lithium, and SQM. Albermarle stock’s fair value estimated at $275.

Albermarle stock dropped 17% after announcing a $2 billion equity issue. Analyst updated fair value estimate to $275 from $300, considering the issuance’s dilution effect. Despite this, stock remains undervalued. Lithium Americas is a challenger with stock price below $5, expected to rise with new leadership.

Long-term lithium demand is strong, driven by electric vehicles. While EV sales are slow now, future growth is expected with more infrastructure. Analyst predicts lithium prices to increase by 600% by 2050. The IEA forecasts rising demand. Concerns exist about lithium’s scarcity and environmental impact.

Analyst Goldstein sees upside in EV sales and lithium demand. He remains optimistic despite challenges, citing potential network effects. While lithium may face competition from alternative battery technologies, current trends show growth. Lithium remains a crucial component in the shift toward clean energy.



Read more at Morningstar: Are Lithium Stocks Undervalued? | Morningstar