John Roberts CFA, an analyst from Mizuho Securities, assigned the Hold rating on Arcadium Lithium Plc (ALTM – Research Report). The associated price target remains the same with $5.00.
John Roberts CFA has given his Hold rating due to a combination of factors that suggest Arcadium Lithium Plc (ALTM) is currently facing a balanced mix of opportunities and challenges. The analyst’s assessment points to the company’s adjusted EBITDA for the calendar year 2024, which aligns closely with current market expectations and spot prices for lithium carbonate. Although Arcadium Lithium has a portion of its volume secured under higher-priced legacy contracts, the overall stability in MarQ24 pricing indicates that significant growth or deterioration in the near term is unlikely. The firm’s finished product volumes are expected to increase due to expansions, but this is somewhat mitigated by a decrease in raw material ore sales, leading to a modest year-over-year volume growth on a pro forma basis.
Furthermore, the sales mix between Arcadium’s product segments reveals varied performance, with hydroxide sales showing a slight increase and combined carbonate/chloride sales experiencing a notable decline. The spodumene segment has also seen a considerable drop in sales, which could be a concern as the mine approaches the end of its current low-cost reserves. Despite these specifics, the company’s valuation shows a slight increase in EPS estimates for the forthcoming years, yet the price target remains unchanged. The current valuation multiples are conservative when compared to larger, more established peers in the industry, indicating that while the company has potential, there are enough uncertainties to warrant a neutral Hold stance at this time.
Roberts CFA covers the Basic Materials sector, focusing on stocks such as Albemarle, Ecolab, and International Flavors & Fragrances. According to TipRanks, Roberts CFA has an average return of 5.8% and a 61.07% success rate on recommended stocks.
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Arcadium Lithium Plc (ALTM) Company Description:
Arcadium Lithium plc (NYSE: ALTM, ASX: LTM, ‘Arcadium Lithium’) today announced the completion of the all-stock merger of equals between Allkem and Livent. The new, combined company is a leading global lithium chemicals producer committed to safely and responsibly harnessing the power of lithium to improve people’s livesand accelerate the transition to a clean energy future. With roughly U.S.$1.9 billionof combined total revenue in 2022 and a global team of more than 2,600 employees, Arcadium Lithium is one of the largest integrated producers of lithium chemicals in the world.
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