Lithium Americas (LAC)

Oct 19, 2022Trade Ideas

Weakness in lithium stocks, like Lithium Americas (LAC) should be temporary.

Not only is the stock technically oversold on RSI, MACD, and Williams’ %R, it should continue to benefit from a lithium supply-demand imbalance. Analysts seem to like the LAC stock, too. Over the last few weeks, Deutsche Bank raised its price target on the stock to $36 from $33, with a buy rating. Piper Sandler also has an overweight rating on the stock with a price target of $38 a share. Analysts say LAC’s Thacker Pass will ultimately be completed.

In addition, according to a recent press release, the company just confirmed its hearing date of January 5, 2023 for the Thacker Pass decision appeal.

“With all state and federal permits received to begin construction, the ruling on Thacker Pass’ ROD represents the final regulatory hurdle to move forward the largest and most advanced lithium chemicals project in the US,” said Jonathan Evans, President and CEO. “We stand ready to develop a critical source of lithium supply, creating jobs and enabling a more sustainable battery ecosystem in North America. As we await a ruling by the Federal Court, we are moving ahead with all areas required to support construction, including final selection of an EPCM contractor, evaluating partnership and supply agreements, as well as progressing our application with the US Department of Energy loan program.”

If all goes well, LAC could see higher highs.

LAC last traded at $23.42. We’d like to see it refill its bearish gap around $27, near-term.

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