6 Best Lithium Stocks to Buy Now

Sociedad Química y Minera de Chile

• Market value: $24.0 billion
• TipRanks consensus price target: $102.75 (22.1% upside potential)
• TipRanks consensus rating: Moderate Buy

Sociedad Química y Minera de Chile (SQM (opens in new tab), $84.13) is a chemical company headquartered in Santiago, Chile, that supplies iodine, lithium, industrial chemicals and plant nutrients. The company develops its products from "caliche ore and brines extracted from mineral resources located in northern Chile in the Antofagasta and Tarapacá regions."

When it comes SQM's place on this list of the best lithium stocks, the company expects to produce 180 metric tonnes of lithium carbonate in 2023 and is one of the world's largest lithium producers.

Shares of SQM have jumped by more than 5% for the year-to-date amid investor expectations that the reopening of China could boost the demand for lithium from EV companies.

According to Deutsche Bank analyst Corinne Blanchard, the reopening of China and the removal of federal subsidies for EVs could see "sentiment and demand to further strengthen" in the second quarter and the rest of 2023.

This could lead to the market for lithium remaining tight for this year – a sentiment echoed by SQM in its third-quarter earnings press release. SQM stated that the "high price environment" could well continue this year.

For analyst Blanchard, SQM remains a top pick in 2023, as she foresees around "~15% lithium volumes increase in 2023 from its brownfield expansion in Chile." The Salar Futuro project of SQM in Chile has seen an investment of $1.5 billion and aims to be a "sustainable mining operation" over the long term.

Moreover, the company is in the process of expanding its lithium hydroxide production capacity in Chile to 100,000 metric tons from 40,000 metric tons earlier, which will require an investment of $360 million. SQM expects to have this production capacity up and running by 2025.

Sociedad Química y Minera de Chile has also purchased and developed a new plant in China that will be able to produce around 30,000 metric tons of lithium hydroxide.

Considering these factors, Blanchard believes that SQM "should also see incremental volumes coming from China, but likely towards the end of 2023, which should become more substantial going into 2024."

Another positive for investors? SQM is one of the best dividend stocks, currently yielding around 9.2%. And Blanchard has forecast a 14% dividend return for the stock in 2023. The analyst has a Buy rating and a price target of $95 on the stock, implying upside potential of around 13%.

Two of the five analysts surveyed by TipRanks categorize SQM stock as a Buy. Hear what else the pros have to say about SQM on TipRanks (opens in new tab).

Albemarle

• Market value: $28.4 billion
• TipRanks consensus price target: $312.20 29.06.4% upside potential)
• TipRanks consensus rating: Moderate Buy

Albemarle (ALB (opens in new tab), $241.96) is a specialty chemicals company headquartered in Charlotte, North Carolina. ALB has three business divisions, including lithium, bromide specialties and refining catalysts.

Late last month, the specialty chemical company announced a new subsidiary for its refining catalysts business called Ketjen. ALB plans to operate this business separately, and Ketjen will have three divisions: Fluidized Catalytic Cracking (FCC); Clean Fuels and Hydroprocessing Catalysts (HPC); and Performance Catalyst & Curative Solutions (PCS).

The company announced solid fourth-quarter financial results in mid-February. Adjusted earnings per share jumped to $8.62 from $1.01 in Q4 2021. Revenue was up 1.93% year-over- year to $2.6 billion.

In fiscal 2023, the company is targeting adjusted earnings in the range of $26 to $33 per share, in line with expectations of $28.08 per share, while net sales are anticipated to be between $11.3 billion and $12.9 billion – a 55% to 75% increase over 2022.

Albemarle's long-term growth outlook remains robust, as it has forecasted its net sales to grow at a compounded annual growth rate between 19% and 21% over the next five years, while adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) is estimated to range from $7.2 billion to $8.4 billion by 2027.

Indeed, even Piper Sandler's top-rated analyst, Charles Neivert (opens in new tab), is bullish about ALB stock, with a Buy rating and a price target of $330 on the stock. Neivert perceives ALB as a pure-play lithium stock going forward.

The analyst's outlook is also supported by Albemarle's expectation that there is likely to be a deficit of 800,000 tons of lithium at the end of this decade. And the company expects to supply 600,000 tons of lithium by 2030.

Considering this scenario, Nievert expects that looking ahead, "this share should exceed 90% of EBITDA, driven by lithium pricing, which we see leveling off in 2023 and slightly declining in 2024, and significant volume expansions."

Out of 17 analysts covering ALB in the past three months, nine are bullish on the stock. Check out Wall Street's average, highest and lowest price targets for ALB on TipRanks. (opens in new tab)

Allkem

• Market value: $5.0 billion
• TipRanks consensus price target: $11.40 (45.0% upside potential)
• TipRanks consensus rating: Moderate Buy

Allkem (OROCF (opens in new tab), $7.86) is a specialty lithium chemicals company headquartered in Buenos Aires, Argentina. The company's business portfolio includes its Olaroz lithium brine and other borax operations in Argentina; Mt. Cattlin, its hard-rock lithium operation in Australia; and its lithium hydroxide conversion facility in Naraha, Japan.

OROCF has plans to ramp up its lithium production threefold by 2026 and intends to maintain its 10% share of the global lithium market on an international basis over the next 10 years.

Earlier this month, the company issued its fiscal second-quarter quarterly update, which saw its Olaroz lithium facility achieve record production of 4,253 tonnes of lithium carbonate, up 17% year-over-year. Allkem's Olaroz lithium mine generated record fiscal Q2 revenues of $151 million.

Overall, Allkem recorded total revenues of $265 million in its fiscal second quarter, while its gross operating cash margin stood at 82%.

BMO Capital analyst Joel Jackson has rated Allkem a Hold as he sees the lithium giant advancing further as prices remain flat, and development projects continue. The analyst has a price target of $9.29 on the stock, implying upside potential of 18.2% at current levels.

As the demand for lithium continues to ramp up and cause higher prices, analysts maintain their belief that OROCF is one of the best lithium stocks out there. This is evidenced in the consensus Moderate Buy rating and $11.40 price target, representing implied upside of 45%. See the full rundown of analyst ratings for OROCF on TipRanks. (opens in new tab)

Sigma Lithium

• Market value: $3.5 billion
• TipRanks consensus price target: $45.19 (39.4% upside potential)
• TipRanks consensus rating: Strong Buy

Sigma Lithium (SGML (opens in new tab), $34.23) is a Canadian company with its operations located in Brazil. It has four mineral properties, including Grota do Cirilo, Sao Jose, Santa Clara and Genipapo.

Earlier this year, the company announced the commissioning of the Dense Medium Separation module of its Greentech production plant and said it anticipates commercial production of battery grade lithium concentrate to begin in April of this year. SGML also expects to start generating cash flow in the second quarter of 2023.

The company has also made some management changes recently, with Rodrigo Menck tapped as the new chief financial officer and Brian Talbot, Sigma's current chief operating officer, continuing to lead its operations in Brazil.

Back in December, the company unveiled plans to triple its production to 100,000 metric tons of lithium carbonate annually by 2024. This followed a study at its Grota do Cirilo project in Brazil and the commissioning of this mine. Production is expected to begin at Grota do Cirilo by April of this year.

Shares of SGML have increased by north of 21% so far in 2023. BMO Capital analyst Joel Jackson believes that the stock has even more upside potential as it expands production and could be a potential acquisition target.

The analyst has a Buy rating with a price target of $40 on the stock, implying an upside potential of 16.9% at current levels. Check out other analysts' price targets and analysis for SGML at TipRanks. (opens in new tab)

Lithium Americas

• Market value: $3.4 billion
• TipRanks consensus price target: $36.10 (60.0% upside potential)
• TipRanks consensus rating: Strong Buy

Lithium Americas (LAC, $22.56) is a mining company that is progressing its lithium projects in Argentina and the U.S. toward production. LAC has been a solid performer on the charts so far in 2023, up more than 19% for the year-to-date. 

Late last year, the company announced the acquisition of Arena Minerals in an all-stock deal valued at $227 million based on the Dec. 19, 2022, closing price. Once the transaction is complete, Arena Shareholders will own approximately 5.7% of Lithium Americas.

"The significant synergies between our two projects and better understanding of the basin will enable us to advance development planning and maximize our growth pipeline in Argentina," said Jonathan Evans, president and CEO of Lithium Americas, about the acquisition. "The timing of the Transaction aligns with the Company's previously announced plan to separate into two public companies in 2023, with significant project development activities expected at both businesses early next year."

That separation, which will create two separate companies from LAC's North American and Argentine business units, will likely occur later this year. One will be Lithium International, an Argentina-focused lithium company that will own Lithium Americas' current interest in its Argentine lithium assets, including the near-production Caucharí-Olaroz lithium brine project.

The other will be Lithium Americas (NewCO), a North America-focused lithium firm that will own the Thacker Pass lithium project in Humboldt County, Nevada, as well as LAC's other North American investments.

Lithium Americas' Thacker Pass operation in Nevada is the largest-known lithium resource in the U.S. This project has yet to start operations as there is a hearing going on (opens in new tab) over the legality of former President Donald Trump's 2021 approval of the mine.  Earlier this month, a U.S. judge stated that she would issue a ruling "in the next couple of months."

Despite this setback, Scotiabank analyst Ben Isaacson is bullish about LAC and believes it "has all the ingredients to outperform its peers in 2023."

The analyst notes that LAC is "weeks away from becoming the world's newest lithium producer" as it gets ready to commission its 40,000 metric tonnes Cauchari-Olaroz lithium carbonate project and the Thacker Pass project is construction-ready.

The upbeat outlook regarding LAC stock has further been bolstered by the news late last month that General Motors (GM (opens in new tab)) announced an equity investment worth $650 million in Lithium Americas. The carmaker will also jointly develop the Thacker Pass mine in Nevada.

All five analysts covering LAC in the past three months are bullish on the stock. Check out Wall Street's average, highest and lowest price targets for LAC on TipRanks. (opens in new tab)

Piedmont Lithium

• Market value: $1.1 billion
• TipRanks consensus price target: $109.67 (72.4% upside potential)
• TipRanks consensus rating: Strong Buy

Shares of Piedmont Lithium (PLL,$63.60) have soared more than 41% for the year-to-date, compared to a gain of 4.2% in the S&P 500 Index. The lithium mining company got a boost after the Biden administration's push for EVs.

Earlier this month, PLL also amended its agreement with one of Wall Street's top EV stocks, Tesla (TSLA (opens in new tab)). Under the terms of the new agreement, Piedmont will deliver around 125,000 metric tonnes of spodumene concentrate (SC6) to Tesla beginning in the second half of this year through the end of 2025. This agreement will be binding for a period of three years and includes an option to renew the agreement for another three years.

Late last year, the company also received a grant of $141.7 million from the U.S. Department of Energy for the construction of its Tennessee Lithium Project, worth $600 million. This project is looking at expanding the U.S. supply of lithium hydroxide by 30,000 metric tons per year.

For Cowen analyst David Deckelbaum (opens in new tab), PLL is a top investing idea for 2023, with shares poised to climb more than 60% this year. "PLL is positioned for a meaningful re-rate in our view in 2023 as ongoing lithium pricing strength intersects with PLL's first cash flows that we believe are under-appreciated with the restart of the NAL mine in Quebec," the analyst wrote in a research note.

Deckelbaum is referring to the North American Lithium mining operation in Quebec, Canada, in which Piedmont Lithium  has a 25% stake. Australia's Sayona Mining has a 75% stake in this mine. This mine received its last remaining permit late last year, and production of spodumene concentrate is expected to begin in the first half of 2023.

"PLL offers a pure-play emerging expression on the proliferation of the U.S. battery supply chain that is underappreciated in our view," Deckelbaum added.

Deckelbaum has a Buy rating and a price target of $90 on the stock. Most of the pros following PLL agree that it's one of the best lithium stocks to watch, with three unanimous Buys, according to TipRanks. See the full analyst rundown of PLL shares. (opens in new tab)