Piedmont Lithium Inc (PLL)

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'Substantial premiums' baked into lithium stocks, BofA analyst says


Aug. 16, 2021 3:57 PM ETALB, LIT...Standard Lithium Ltd. (SLI)Sociedad Química y Minera de Chile S.A. (SQM)Lithium Americas Corp. (LAC)

By: Carl Surran, SA News Editor

Albemarle (ALB -3.9%) and Livent (LTHM -5.4%) are "priced for perfection" after "significant hype" in lithium stock valuations, and the two companies likely will be unable to deliver on the market's high long-term growth expectations, Bank of America says in maintaining its Underperform ratings on the stocks.

"We find equity values bake in substantial premiums to what companies can achieve based on their footprints and market growth," BofA's Matthew DeYoe says of the names, noting lithium carbonate prices already have begun to level off following last year's spike in work-from-home demand for battery-powered devices such as laptops and power tools.

DeYoe expects lithium supply will remain tight but that investors can expect 2022 production to roughly double 2021 production, as reported by Benzinga.

Other lithium stocks also trade deep in the red: SLI -9.3%, SQM -5.4%, LIT -4.6%, LAC -4.5%.