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Sociedad Quimica Y Minera De Chile SA ADR SQM

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Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Lithium Stocks Rally on Infrastructure Bill, but Our View Is Unchanged; SQM and Compass Undervalued

Seth Goldstein, CFA Senior Equity Analyst

Analyst Note

| Seth Goldstein, CFA |

On July 29, lithium producer stocks rallied on the news that the U.S. infrastructure bill was advancing in the Senate. The bill features $7.5 billion of funds that would be used to build 500,000 high powered electric vehicle chargers throughout the country. We had expected this to occur and had already incorporated this into our outlook for EV adoption and subsequently lithium demand, lithium prices, and producer profits. With our outlook unchanged, we maintain our fair value estimates of $145 per share for narrow-moat Albemarle, $88 per share for wide-moat Compass Minerals, $17 per share for narrow-moat Livent, and $58 per share for narrow-moat SQM. 

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Company Profile

Business Description

SQM is a Chilean commodities producer with significant operations in lithium (for electric vehicle batteries), specialty potassium fertilizers, iodine (for X-ray contrast media), and solar salts. The company extracts these materials through its high-quality caliche ore and salt brine deposits.

Contact
El Trovador 4285, 6th Floor, Las Condes
Santiago, Chile
T +56 224252000
Sector Basic Materials
Industry Chemicals
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type —
Employees 5,469

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