Goldman Sachs raised its price target on Abemarle to $125 from $123 and reiterated its buy rating on the stock as the bank predicted that over-capacity in the lithium sector is overdone. It also, reiterated its buy rating on FMC with a price target of $114. The company said it expects demand for lithium-ion batteries will grow by about 30% over the next five years, but also noted that there are still some challenges facing the industry. Contract prices set by companies haven’t provided full protection in other industries, but with rapidly declining industry operating rates, he expects this structure to provide some protection for the lithium industry. Analysts said the the strong selloff in the stock and other lithium stocks in the last few quarters were driven by "a jarring sentiment shift from optimistic enthusiasm for the potential of lithium to fuel the electric vehicle (EV) revolution to growing concerns about aggressive lithium supply expansions that threaten to expose lithium as just another commodity metal. Lithium carbonate spot prices will decline toward $6,500 per ton and contract prices to $10,500 per ton by 2023 before rising, he said.
Goldman Sachs raised its price target on Abemarle to $125 from $123 and reiterated its buy rating on the stock as the bank predicted that over-capacity in the lithium sector is overdone. It also, reiterated its buy rating on FMC with a price target of $114. The company said it expects demand for lithium-ion batteries will grow by about 30% over the next five years, but also noted that there are still some challenges facing the industry. Contract prices set by companies haven’t provided full protection in other industries, but with rapidly declining industry operating rates, he expects this structure to provide some protection for the lithium industry. Lithium carbonate spot prices will decline toward $6,500 per ton and contract prices to $10,500 per ton by 2023 before rising, he said.