Lithium miner Livent saw shares rebound on the company’s strong earnings and outlook.
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Lithium miner Livent reported better-than-expected fourth-quarter numbers. What’s more, guidance for 2022 topped Street estimates. Shares tumbled in Thursday’s regular trading session, but after hours, when Livent reported strong earnings, the stock began to surge. It remains higher Friday.
Livent (ticker: LTHM) stock dropped 11.7% Thursday after another lithium miner, Albemarle (ALB), reported earnings that beat the Street, but guidance for 2022 seemed to disappoint investors. Albemarle stock sank almost 20% on Thursday, dragging down the lithium-mining sector.
Thursday evening, after the close of trading, Livent reported earnings per share of 8 cents on sales of $123 million topping consensus estimates. Analysts polled by Bloomberg had expected EPS of 7 cents on sales of $106.
Strong results came as a relief to nervous Livent investors. Livent stock is now up almost 9% in Friday morning trading. S&P 500 and Dow Jones Industrial Average are up about 0.6% and 0.5%, respectively.
Still, at $24.13 a share, Livent stock is below Wednesday’s close of $25.08.
Looking ahead for 2022, Livent expects to generate about $180 million in Ebitda, short for earnings before interest, taxes, depreciation, and amortization, on about $570 million in sales. Analysts were projecting closer to $160 million in Ebitda on $515 million in sales.
“Sometimes it’s really that easy,” wrote Evercore ISI analyst Stephen Richardson in a Thursday report. He was referring to the relatively clean quarter Livent just reported.
Albemarle’s quarter wasn’t as easy to digest. Richardson wrote earlier on Thursday that Albemarle’s volume and earnings guidance was better than he expected, but that the company’s guidance for costs and capital spending would be a drag on 2022 cash flow.
He is staying positive on both stocks. He rates Albemarle stock at Buy with a $295 price target. He didn’t adjust he price target after the company’s quarterly hiccup. Richardson actually put Albemarle stock on his “tactical outperform list” Friday.
“The confusion from [Albemarle] investors came largely on the cost line which lead some to believe this was a structural step-up in costs [and] lower margins, and was a new permanent aspect of the business,” wrote the analyst. “We think none of this is indeed true.”
Richardson also rates Livent stock at Buy with a $40 price target.
Overall, analysts are more bullish on Albemarle stock than Livent stock. About 58% of analysts covering Albemarle rate shares at Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 58%. The average analyst price target for Albemarle stock is about $251, up 27% from recent levels.
About 44% of analysts covering Livent stock rate it at Buy, and the average analyst price target is about $29 a share. That’s up about 33% from recent levels, but Livent is a smaller company than Albemarle. Analysts always want more upside in small-capitalization stocks.
Write to Al Root at [email protected]
