UPDATE: BofA Securities Downgrades Sociedad Quimica y Minera (SQM) to Underperform

BofA Securities analyst Isabella Simonato downgraded Sociedad Quimica y Minera (NYSE: SQM) from Neutral to Underperform with a price target of $50.00 (from $67.00).

The analyst comments "We downgrade SQM to Underperform from Neutral with a US$50/ADR price objective, down from US$67/ADR. Last night, Chile elected a new president, Mr. Gabriel Boric (far-left Apruebo Dignidad), who has an agenda that brings downside risks to SQM, in our view. His government program considers the creation of the National Lithium Corporation, a state-owned enterprise that will be in charge of developing the Lithium industry; and the implementation of a new governance of the salars. While higher taxes and interference of existing concessions are not formally considered, we believe they could be potentially be a risk for SQM. We thus cut our target 2022 EV/EBITDA multiple to 8x from 14x (50% of valuation), while we increase our WACC to 9.6% from 8.9% on higher Beta (at 1.5% from 1.3%) to reflect higher risk perception."

For an analyst ratings summary and ratings history on Sociedad Quimica y Minera click here. For more ratings news on Sociedad Quimica y Minera click here.

Shares of Sociedad Quimica y Minera closed at $55.91 yesterday.

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