January 23, 2023

Lithium Americas, SQM top picks at Scotiabank in bullish sector view

Battery — alengo/E+ via Getty Images

Lithium Americas (NYSE:LAC) and SQM (NYSE:SQM) march higher in Monday’s trading, +3.4% and +4.6% respectively, as Scotiabank analyst Ben Isaacson tapped the pair as the sector’s top picks with “an increasingly bullish view the farther out we look.”

Without “a slew of new advanced-stage projects moving to construction imminently, a holy grail for the industry to improve recovery rates, and/or an unprecedented pivot to improved secondary supply from recycling, it’s hard to justify why prices should moderate toward the cost curve over the next five-plus years,” Isaacson wrote in a bullish take on lithium (NYSEARCA:LIT).

Lithium Americas (LAC) “has all the ingredients to outperform its peers in 2023,” according to the analyst, noting it is “weeks away from becoming the world’s newest lithium producer,” as it commissions its 40K mt Cauchari-Olaroz lithium carbonate project, and the Thacker Pass project is construction-ready, with preliminary work underway.

Scotiabank also rated lithium peers Albemarle (ALB) and Livent (LTHM) at Sector Perform.

Lithium Americas (LAC) represents “incredible value” but also is “very risky” due to the uncertain outcome of the Nevada pending legal case, Austin Craig writes in an analysis posted recently on Seeking Alpha.

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