Rising Lithium Prices Are Lifting Livent (LTHM) Stock. What to Know.


Livent (NYSE:LTHM) stock is jumping more than 20% today after the company reported better-than-expected first-quarter results and raised full-year guidance. The firm’s strong earnings, announced after market close yesterday, were driven by soaring lithium prices amid electric vehicle (EV) demand. Most EVs use lithium-ion batteries.

lithium (LI) on the periodic table
Source: Shutterstock

For Q1, Livent’s top line soared roughly 56% versus the same period a year earlier to $143.5 million. Analysts had expected revenue of around $140 million. The lithium producer’s earnings per share (EPS), excluding some items, also came in at 21 cents. That beat analysts’ average estimate by seven cents.

But that’s not all. On the guidance front, Livent also increased its revenue estimate for the year to between $755 million and $835 million. This is a significant increase from the prior outlook of between $540 million and $600 million. Moreover, the company now expects EBITDA to be between $290 million and $350 million, well above previous guidance.

Livent Reports Q1 Earnings

On the Q1 earnings call, CEO Paul Graves noted that Livent had “benefited from higher realized pricing, supported by growing customer demand and increasingly tight lithium market conditions.” Graves added the following:

 “[T]he most important feature of our Q1 performance was the ability to take advantage of, and actually realize these higher prices across our customer portfolio.”

In related news, the U.S. Department of Energy (DOE) announced on May 2 that it would spend $3.16 billion “to boost domestic battery manufacturing and supply chains” in the United States. The DOE stated:

“The infrastructure investments will support the creation of new, retrofitted, and expanded commercial facilities as well as manufacturing demonstrations and battery recycling.”

These funds will come from the Bipartisan Infrastructure Law, which Congress passed and President Joe Biden signed into law late last year.

Currently, LTHM stock is up 10% so far this year.

On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been PLUG, XOM and solar stocks. You can reach him on Stocktwits at @larryramer.

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