Investors may want to keep an eye on Lithium Americas (LAC).
The red-hot lithium stock has plans to split in two, making it far more attractive.
If it happens, the first half of the split would be an Argentina-focused lithium company, which would own interest in its Argentine lithium assets, including the near-production Caucharí Olaroz lithium brine project in Jujuy, Argentina. The other would own the Thacker Pass lithium project in Humboldt County, Nevada, and the company’s North American investments.
Even better, the company, as it stands now, is moving Thacker Pass towards production and has received all federal and state permits needed to commence construction, with a ruling on the Record of Decision appeal expected in early 2023. With regards to Caucharí-Olaroz, the goal is to bring Stage 1 operations of 40,000 tonnes per annum to production by the new year 2023.
Over the last few weeks, B. Riley initiated a buy rating on the LAC stock, with a price target of $41 a share. Evercore ISI initiated an outperform rating on the stock, with a $35 price target.
According to TheFly.com, Evercore ISI analyst Stephen Richardson views the company’s announced separation as “the central value event for this stock” given his view that it offers “the value uplift of a lithium producer in Argentina” and “a world scale lithium development project in North America.” Early 2023 will mark an important milestone given that both completion of construction at Cauchari-Olaroz in Argentina and clarity on the legal appeals surrounding permitting at Thacker Pass in Nevada will reach their conclusion.
Shares of LAC last traded at $26.40. We’d like to see it rally back to $30 shortly.