Deutsche Bank Starts SQM (SQM) at Buy
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Deutsche Bank initiated coverage on SQM (NYSE: SQM) with a Buy rating and a price target of $33. Analyst Chris Terry noted its growing profitability in lithium.
"SQM, based in Chile, is the world's largest producer of iodine and potassium nitrate. Additionally, the company is the second-largest lithium producer globally. We like the diversification of the business with five main segments; in 2017 we forecast lithium to generate 49% (from 17% in 2015) of EBITDA, Specialty Plant Nutrition 28%, Potassium 11%, Iodine 7% and Industrial Chemicals/Other 4%. SQM is well positioned to capitalize on strong lithium demand growth driven by the battery sector with leverage to price and volume (second project, Caucharí, due by 2019). We initiate coverage of SQM with a $33/ADR PT and Buy rating with 20% upside to the current share price," said Tery.
Shares of Sociedad Quimica y Minera closed at $26.51 yesterday.
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