HSBC Downgrades Arcadium Lithium PLC (ALTM) to Hold

HSBC analyst Santhosh Seshadri downgraded Arcadium Lithium PLC (NYSE: ALTM) from Buy to Hold with a price target of $5.85 (from $4.25).

The analyst comments: "Though the sale agreement occurs at what we believe to be the trough of the cycle, the valuation seems fair given near-term risks to capacity and a possible equity dilution and/or leveraged balance sheet had the company raised additional financing. While Arcadium's capacity target of 175ktpa by 2028e look attractive on paper, the company has slowed expansion, given cash constraints. Hence, we expect long-run production of c100ktpa and on an attributable basis the offer price implies USD71k/t. For comparison, on 2025e production, EV/ton would be cUSD130k/t for Arcadium versus ALB's USD55k/t and USD63k/t that ALB offered for Liontown in 2023."

For an analyst ratings summary and ratings history on Arcadium Lithium PLC click here. For more ratings news on Arcadium Lithium PLC click here.

Shares of Arcadium Lithium PLC closed at $5.55 yesterday.

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