1. Piedmont Lithium Inc. (NASDAQ:PLL)
Average Analyst Price Target Upside as of September 12: 175.86%
Number of Hedge Fund Holders: 9
Piedmont Lithium Inc. (NASDAQ:PLL) is well-known in the lithium market, specifically targeting the growing EV battery sector. The company’s Carolina Lithium Project spans approximately 3,706 acres in North Carolina’s Carolina Tin-Spodumene Belt. The region, located northwest of Charlotte, is crucial for its spodumene ore, a primary source of lithium.
In addition to this major project, it also owns properties in Bessemer City and Kings Mountain, North Carolina, which advance its development efforts. Aiming to capitalize on the growing demand for EVs, the company is focused on lithium hydroxide production. The compound is important for the lithium-ion batteries that power EVs.
In addition to its North Carolina projects, the company is advancing its lithium endeavors in Quebec. The North American Lithium project is known for being the largest spodumene mine in North America, which will be instrumental in meeting the increasing battery market needs. The company aims to produce around 60,000 metric tons of lithium hydroxide annually from these operations, contributing significantly to the U.S. lithium supply.
The company’s vision is to become a top lithium producer in North America and respond to the need for a more localized supply chain. Its goal is to produce 30,000 metric tons of lithium hydroxide annually from its Carolina Lithium Project, which will be a comprehensive operation converting spodumene ore into lithium hydroxide.
In 2022, Piedmont Lithium (NASDAQ:PLL) secured an important supply contract with Tesla, agreeing to supply spodumene concentrate through 2025. The agreement was adjusted in 2023 to include a floating price mechanism, which allows for more adaptability in pricing. Under the updated terms, the company will deliver 125,000 tonnes of spodumene concentrate, sourced from Sayona Mining’s North American Lithium project in Quebec, Canada.
The company is also forging strong partnerships to fuel its expansion. A significant development occurred in April 2023 when LG Chem, a prominent battery manufacturer, made a $75 million equity investment in Piedmont Lithium (NASDAQ:PLL).
The deal not only provides significant capital but also involves LG Chem committing to purchase 200,000 metric tons of spodumene concentrate over four years. The partnership is in line with the growing demand for battery materials in North America, supported by incentives for domestic production through the Inflation Reduction Act.
On August 12, B. Riley analyst Matthew Key lowered the price target on the stock to $20 from $26 and kept a Buy rating after the Q2 report. The revision reflects the company’s decision to consolidate its operations, moving the proposed Tennessee Lithium capacity to Carolina Lithium.
As per the analyst, the shift is expected to enhance economic efficiency and technical performance, making the North Carolina project more economically viable due to its integrated nature. The strategic move positions the company for continued growth and success in the expanding lithium market.
The stock has received a consensus Buy rating from 10 analysts. As of September 12, the average price target of $20 has an upside of 175.86% from the current levels. It takes the top spot on our list of the most promising EV battery stocks according to analysts.
In the second quarter, 9 hedge funds had stakes in Piedmont Lithium (NASDAQ:PLL), with total positions worth $9.559 million.
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