Wall Street Favorites: 3 Lithium Stocks With Strong Buy Ratings for February 2024


  • These lithium stocks are calling for double and even triple-digit upside from analyst ratings.
  • Sociedad Quimica y Minera de Chile (SQM): Operating in the world’s largest lithium reserves in Chile, this company has now landed an exclusive deal with the world’s EV leader.
  • Albemarle (ALB): Recording a double-digit jump in the top and bottom line financials, this stock has attracted analyst bullishness in their price targets and EPS projections.
  • Lithium Americas (LAC): The one that offers the most upside for those who can handle and stomach a bit more risk, all in the hopes of an imminent lithium exploration announcement.
Lithium stocks - Wall Street Favorites: 3 Lithium Stocks With Strong Buy Ratings for February 2024

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Today’s factories depend on technology for optimal and efficient assembly processes, and these new methods require semiconductors, chips and batteries to function. If that wasn’t enough, a growing percentage of the population has access to laptops and smartphones, not to mention the developed nation’s tendency to shift toward electric vehicles. Lithium stocks are set for a boom in the coming years, an indispensable addition to your portfolio.

Sociedad Quimica y Minera de Chile (SQM)

Sociedad Quimica y Minera logo displayed on a mobile phone with the company's web page on it. SQM stock
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This one is a bit of an analyst favorite lately; operating within the world’s largest lithium reserves in Chile, Sociedad Quimica y Minera de Chile (NYSE:SQM) is at the forefront of the explosive lithium demand to be commanded by the world’s fastest-growing EV firms.

You may have heard that BYD (OTCMKTS:BYDDF) has overtaken Tesla (NASDAQ:TSLA) to become the world’s largest seller of electric vehicles. It just so happens that BYD also landed an exclusive deal with Sociedad Quimica for lithium contracts.

This means one thing for both the lithium miner and the EV company: pricing power and nearly guaranteed volumes in the commodity moving forward.

Considering that analysts now expect earnings per share to grow by 21.6% in the next 12 months, it should be no surprise to learn that a consensus price target of $69.1 a share would call for a 62.4% upside from today’s prices.

One last thing: this stock reached an all-time high price of $115.7 a share in 2022, leaving today’s prices to be an incredibly low bargain price for a stock attracting buy ratings and high price targets from Wall Street analysts.

Albemarle (ALB)

Albemarle (ALB) logo on a mobile phone screen
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No company can report 31.0% jumps in their revenues alongside 21.0% volume growth without having a well-defined tailwind behind it to push off. That is the case for Albemarle (NYSE:ALB) in their latest quarterly earnings report.

Analysts at The Goldman Sachs Group (NYSE:GS) expressed their interest in a manufacturing breakout in the United States economy; you can read the thesis behind the view in this 2024 macro outlook report. Knowing what you know now, if Goldman is right, then Albemarle is in for one heck of a rally in the coming quarters.

Goldman isn’t the only party pushing for a bullish case on Albemarle since today’s consensus price target stands at $193.0 a share, implying a rally of up to 68.1% from where the stock trades today. EPS projections set at 25.3% growth for this year act as a justification for these valuation targets in the stock as well.

Almost a mirror image to Sociedad Quimica, Albemarle stock is trading at a fraction of its all-time high price of $334.5 a share in 2022. Your portfolio could surely use an irresistible discount in a new fundamental push to higher valuations as a watchlist addition.

Lithium Americas (LAC)

smartphone with logo of Canadian company Lithium Americas Corp on screen
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Last but not least, Lithium Americas (NYSE:LAC) is a company that promises the most potential upside for those with the stomach—and the patience to handle prolonged periods of uncertainty and obscurity. Still, you are here for the big payoff, aren’t you?

This company has yet to make revenues from its operations, as it only counts with the rights to exploration and development of lithium properties in the United States and Canada, which is why the stock price is so cheap today.

On the imminent news that they strike a lithium reserve to start marketing to customers, outlooks and price action could exceed your wildest expectations.

Analysts currently see a price target of $17.1 a share, which is a massive 296.9% above where it trades today to give you the highest potential of the group on the news of a lithium breakthrough. It would seem you now have the whole spectrum of risk-to-reward extremes in this list of lithium plays!

As of this writing, Gabriel Osorio-Mazzilli 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.

Gabriel Osorio is a former Goldman Sachs and Citigroup employee. He possesses discipline in bottom-up value investing and volatility-based long/short equities trading.

Article printed from InvestorPlace Media, https://investorplace.com/2024/02/wall-street-favorites-3-lithium-stocks-with-strong-buy-ratings-for-february-2024/.

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