On Wednesday, Piper Sandler initiated coverage on NASDAQ:ALTM with an underweight rating and a price target of $4.50. The investment firm's valuation is based on a projected 2025 enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) multiple of 7.3 times. This target is reflective of earnings that are expected to be below midcycle levels.
The outlook for the lithium industry is deemed highly challenging through at least 2024 by Piper Sandler. The firm anticipates difficulties as lithium producers, processors, downstream battery producers, and original equipment manufacturers (OEMs) attempt to balance competing interests and establish a stable growth foundation.
The analyst from Piper Sandler highlighted that the rapid increase in lithium prices from mid-2021 to early 2023 might have had adverse effects. This surge in prices led to an aggressive expansion in capacity across the supply chain and a rush to secure future production, which seemed insufficient at the time compared to electric vehicle (EV) forecasts.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.