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Investing.com - BMO Capital maintained its Market Perform rating and $3.50 price target on Lithium Americas Corp. (NYSE:LAC), currently trading at $2.60 with a market capitalization of $571 million, following a recent site visit to the company’s Thacker Pass project. According to InvestingPro data, the company maintains a strong balance sheet with more cash than debt.
The research firm reported that timelines and budget for the Thacker Pass project appear to be on track, though it noted the project is still in early stages of development. BMO Capital identified labor requirements as a key risk factor, with the company needing to increase staffing approximately threefold by the end of 2025 and sixfold by the end of 2026. InvestingPro analysis shows the company’s Financial Health Score is rated as "FAIR," though it’s currently burning through cash rapidly - one of several key insights available to Pro subscribers.
Lithium Americas continues to expect its first Department of Energy loan drawdown in late third quarter of this year, according to the research note. The company had previously hosted BMO Capital analysts at the Thacker Pass site in 2023.
BMO Capital’s $3.50 target price represents a valuation of approximately seven times the company’s estimated 2029 EV/EBITDA, based on lithium carbonate equivalent prices of $18,000 per ton and 95% utilization. This price assumption is double current spot prices for lithium.
The firm’s target price aligns with its 10% net asset value calculation for Lithium Americas, with no changes made to BMO Capital’s financial model following the site visit.
In other recent news, Lithium Americas Corp. has made significant strides with its Thacker Pass project, which is fully funded and supported through a partnership with General Motors (NYSE:GM). This development has led Evercore ISI to resume coverage of the company, assigning it an Outperform rating and setting a price target of $4.50 per share. The analyst from Evercore ISI highlights the company’s strategic position in the lithium market, particularly in light of anticipated lithium prices for 2028 and beyond. The firm notes that the current market conditions, marked by oversupply fears and demand uncertainties, have been challenging, yet Lithium Americas is viewed as maintaining a long-term perspective.
Additionally, Lithium Americas has announced a transition from International Financial Reporting Standards to U.S. Generally Accepted Accounting Principles, effective January 1, 2025. This change aligns the company with U.S. domestic issuer requirements and aims to provide a consistent financial reporting framework for investors, particularly in the United States. The company has restated its unaudited condensed consolidated financial statements for the first three quarters of both 2024 and 2023 to reflect this adoption. This shift is a notable step as Lithium Americas continues to grow and engage with a broader investor base. The restated financial statements have been filed with Canadian securities regulators and are available as exhibits in the SEC filing.
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