Livent Corp. (NYSE: LTHM) Upgraded to Buy at Citigroup

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Livent Corp. (NYSE: LTHM), the lithium technology company, stock rose 2.16% (As on Oct 13, 12:30:13 AM UTC-4, Source: Google Finance) after Citigroup’s upgrade to Buy from Neutral included a price target hike to $28 from $25.

On the other hand, for the second quarter of 2021, the company has reported 57% rise in the revenue to $102.2 million, up 11% from the first quarter of 2021, with reported GAAP net income of $6.5 million, or 3 cents per diluted share.  The company delivered Adjusted EBITDA of $16 million, 44% higher than the first quarter of 2021 and 150% higher versus the prior year. The company had launched and successfully completed a public equity issuance in June, raising gross proceeds of $262 million which will be primarily deployed towards lithium capacity expansions, particularly in Argentina. Livent had resumed its capacity expansion projects in the United States and Argentina earlier this year, backed by the execution of recent long-term supply agreements, an improving market outlook and continued local government and community support. The company is increasing the production capacity and building upon the low cost and sustainable operations will strengthen the commercial footprint and enhance the position as a partner of choice to leading auto OEMs and battery producers.

Further, the pricing conditions have significantly improved during the year and the company has seen a notable improvement in lithium hydroxide and carbonate demand alongside strong global electric vehicle sales growth. The company is increasing support for electrification from OEMs, governments and consumers is solidifying expectations for substantial long-term lithium demand growth.  However, this is not being met with sufficient reliable, qualified supply expansion, which the company expects to be apparent as the market remains tight and occasionally short, particularly over the next few years.

For full year 2021, the company expects the revenue to be in the range of $370 – $390 million and adjusted EBITDA to be in the range of $55 – $70 million. Livent’s 2021 guidance for total capital spending is unchanged at $125 million, as the capacity expansion projects continue to progress. The company has spent $34 million dollars through the first half of the year and expects this to accelerate with additional work over the next two quarters. The company now forecasts for 2021 global electric vehicle sales to exceed 6 million vehicles. This would be nearly double 2020 EV sales of 3.2 million and triple of EV sales of 2.1 million the company saw in 2018.

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