Lithium miners aren’t immune to the latest stock market sell-off, but Piper Sandler said a combination of the electric vehicle boom and a broad focus on transitioning away from fuels. fossils will make this topic always of interest to investors. And Piper found one stock that looked particularly appealing: Livent. Analyst Charles Neivert recently assumed the Philadelphia-based company’s suitability with an overload rating and 12-month price target of $42, implying a 37% gain over the stock level. closed on Friday. Driving the company’s bullish case is the disconnect between supply and demand for lithium, a key EV material. Piper believes the market will remain in deficit for at least the next three to four years, and potentially longer “this will help sustain lithium prices”. “[T]he significantly increased his earning potential and structural changes to [Livent] The balance sheet they deliver makes 2024 earnings a more accurate representation of the company’s outlook and value,” Neivert said, adding that the company’s rising earnings mean it can be self-financing. Shares of Livent fell nearly 12% last week, but the stock still records a 25% gain for 2022. By comparison, the S&P 500 is down about 23% for the year. Lithium is by no means scarce, but bringing new production online can take years Mining is resource and capital intensive and projects often face local opposition due to the potential impact Recession fears have been the main driver of the recent sell-off in stocks, but Piper thinks Livent will do well even in the face of a global economic downturn, the company believes. any drop in auto sales will focus on internal combustion engines rather than electric vehicles In other words, demand for lithium will remain high regardless of the economic backdrop broader economy. ent and General Motors announced a long-term supply agreement. “We’re building a strong, sustainable, scalable and secure supply chain to help meet our rapidly growing electric vehicle production needs,” said Jeff Morrison, GM vice president. know in a statement announcing the partnership. GM added: “We will further localize the lithium supply chain in North America for the duration of the agreement. The Biden administration has repeatedly noted the importance of developing domestic supply chains for critical materials, and funding to support US manufacturing is included in the Inflation Reduction Act passed. passed recently. Furthermore, the electric vehicle offers are tied to a battery part made in the United States. US shares of Livent rallied 4% Monday but were little changed late in the morning. – Michael Bloom of CNBC contributed reporting.