5. Lithium Americas Corp. (NYSE:LAC)
Average Analyst Price Target Upside as of September 12: 87.97%
Number of Hedge Fund Holders: 13
Lithium Americas Corp. (NYSE:LAC) is a lithium exploration and development company, with projects in both the United States and Canada. Its flagship initiative, the Thacker Pass project, is located in the McDermitt Caldera. It is recognized as the site of the world’s largest known lithium deposit. It ranks at 5 on our list of most promising EV battery stocks according to analysts.
As a company poised to become a key player in the global lithium market, Lithium Americas (NYSE:LAC) is strategically positioned to benefit from the surging demand for lithium, driven by the EV revolution and advancements in renewable energy storage.
The Thacker Pass project represents the most promising growth catalyst for the company. It reflects its strategic significance in the lithium supply chain. It is backed by a substantial $2.26 billion loan from the U.S. Department of Energy, which shows the national importance of securing domestic lithium supplies.
Additionally, General Motors has secured exclusive rights to Phase 1 production, which further validates the long-term potential of Thacker Pass. Once operational, the initial phase is projected to produce enough lithium annually to power 800,000 EVs, which marks a significant role for the company in the global transition to clean energy. Despite recent fluctuations in lithium prices, the long-term outlook for rising demand along with the company’s strategic positioning show a compelling case for growth.
On October 3, 2023, Lithium Americas underwent a corporate reorganization, splitting into two distinct publicly traded entities. The separation resulted in the creation of Lithium Americas (Argentina) Corp., also known as Lithium Argentina, which trades on the TSX and NYSE under the symbol “LAAC.” The remaining company, which retained the original name Lithium Americas Corp., trades under “LAC” on both the TSX and NYSE.
The stock is covered by 14 analysts with an average price target of $4.63, which implies an upside of 87.97% from the September 12 levels. On the other hand, Lithium Americas (Argentina) (NYSE:LAAC) has been covered by 13 analyst with a median price target of $5.00, which represents an upside of 93.05%.
While the Thacker Pass is Lithium Americas’ (NYSE:LAC) flagship project, Lithium Americas (Argentina) (NYSE:LAAC) holds interests in several projects, including the Cauchari-Olaroz project in Jujuy Province, Argentina, a development and exploration portfolio in Salta Province, and full ownership of the Antofalla Project in Catamarca Province.
As of the second quarter, 13 hedge funds had stakes worth nearly $32 million in Lithium Americas (NYSE:LAC) and 8 hedge funds had stakes worth $4.005 million in LAAC.
Massif Capital Real Assets Strategy stated the following regarding Lithium Americas Corp. (NYSE:LAC) in its Q2 2024 investor letter:
“Lithium Americas Corp. (NYSE:LAC): No Massif Capital letter would be complete without examining something that is not working or that we got wrong. Thus far this year, the clear winner is our expectation that lithium would make a rebound. Lithium prices have continued to sell off, with lithium hydroxide and carbonate in China down ~10% since the start of the year and the lithium mining sector, as measured by the Global X Lithium ETF, down 18%. The fund’s two lithium investments, Lithium Americas Corp. (NYSE:LAC) and Lithium Argentina, are down 48% and 46%, respectively.
While the story with Lithium Americas, a development company focused on building an exceptionally large lithium asset in Nevada, is complicated, the story with Lithium Argentina is similar to the situation in Siemens Energy last year. The market tossed the baby out with the bath water. The firm’s Cauchari asset in Argentina is a bottom-cost quartile brine asset that is fully built, went into operation last year and continues ramping to full commercial production on schedule. At a 10% discount rate and $12,000 per ton lithium in perpetuity, we still think the firm’s 44% ownership stake in the mine is worth $6 a share, 82% above the current price. At $18,000 per ton, the mine is worth more than $15 a share to the company. The operating leverage to the lithium price is fantastic…” (Click here to read the full text)
