BofA Securities Lifts Sociedad Quimica y Minr de Chile SA (SQM) Price Target amid Lithium Price Surge

Sociedad Quimica y Minera de Chile SA (NYSE:SQM) is one of the top lithium stocks to buy now. On August 26, BofA Securities reiterated an ‘Underperform’ rating on the stock but increased the price target to $43.50 from $36.50.

The price target follows Sociedad Quimica y Minera de Chile stock rallying 28% in August, compared to a 16% increase in spot lithium carbonate prices in China. The rally comes as the stock’s sentiment has improved significantly, with the sector shifting from bearish to bullish. The company delivered impressive second-quarter results, with earnings per share of $0.79, better than the expected $0.58. Revenues reached $2.08 billion, surpassing the expected $1.08 billion.

According to BofA Securities, the significant price increase in Lithium Carbonate is a positive for the industry, as it has triggered upward earnings revisions and short covering on the stock. Nevertheless, the research firm maintains an underperform rating, as it is concerned that the lithium price upside depends on additional Chinese supply cuts.

Sociedad Quimica y Minera de Chile SA (NYSE:SQM) is a Chilean chemical company that supplies plant nutrients, iodine, lithium, and industrial chemicals. It is the world’s biggest lithium producer. It produces lithium carbonate and lithium hydroxide, which are used in the production of cathode material for secondary batteries; lithium chloride; and basic lithium chemicals and lithium derivatives used in lubricating greases.

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Disclosure: None. This article is originally published at Insider Monkey.