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7 Top-Rated Lithium Stocks Wall Street Analysts Are Loving Now: January 2024

Lithium prices have been crushed. But that’ll happen with oversupplied markets, and lower demand for electric vehicles thanks to higher interest rates. However, with some lithium mines shutting down or reducing production we could see less supply. This could help stabilize prices and send lithium prices higher with demand. All of which could be good news for some of the industry’s top-rated lithium stocks.

We also have to consider that if the Fed does cut interest rates, as expected this year, we could see more EV demand. As a result, we could see further upside in lithium prices.

In addition, the global net zero commitment will require a good amount of lithium. Global demand will surpass 2.4 million metric tons by 2030, doubling demand forecasts for 2025. And Bloomberg NEF says that global demand for lithium could grow five times over by the end of the decade. 

That being said, investors may want to take advantage of weakness in these top-rated lithium stocks

Albemarle (ALB)

Albemarle (ALB) logo on a mobile phone screen

Source: IgorGolovniov/Shutterstock.com

Albemarle (NYSE:ALB), the industry’s 800 lb. gorilla plummeted from a high of about $320 in 2022 to a recent low of $117.56. 

Not only is ALB now trading at less than half of growth, with a price-to-earnings growth (PEG) ratio of 0.43, it’s trading at just 4x earnings. However, if lithium prices are bottoming out, and if the Fed does cut interest rates, I’d like to see ALB rally back to $320.

Looking to cut costs by about $95 million a year, it’s reducing its headcount and lowering spending on contracted service. It will also “prioritize permitting activities at the Kings Mountain spodumene resource and defer spending at the Richburg mega-flex lithium conversion facility and its Albemarle Technology Park in North Carolina,” as noted in a company press release.

Arcadium Lithium (ALTM)

a lithium ion battery

Source: Olivier Le Moal/ShutterStock.com

There’s also Arcadium Lithium (NYSE:ALTM), the $5.77 billion company that combined Allkem and Livent to create one of the biggest lithium companies around.

In fact, the company claims to be one of the largest integrated producers of lithium chemicals in the world. It has a $1.9 billion of combined total revenue in 2022 and a global team of more than 2,600 employees.

At the moment, ALTM trades at less than half of growth with a PEG ratio of 0.40. It’s also trading at about 7.5x earnings. Moving forward, I’d like to see ALTM initially test $10 a share.

Sociedad Quimica y Minera (SQM)

Sociedad Quimica y Minera logo displayed on a mobile phone with the company's web page on it. SQM stock

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There’s also the very beaten-down, oversold Sociedad Quimica y Minera (NYSE:SQM), which carries a current yield of 10.35%. While its chart isn’t attractive either, give it time. Most of the negativity has been priced into this lithium stock, too.

Earnings haven’t been too hot either. In its most recent quarter, SQM said revenue slipped 38% YOY to $1.84 billion. Net income came in 56% lower YOY to $479.9 million, as EPS crumbled 56% to $1.68 YOY. 

Also, while we don’t expect its next report to be much better, I believe most of that weakness is being priced in, too. Helping, the company reached an agreement with the National Copper Corporation of Chile to develop lithium in the Salar de Atacama from 2025 to 2060.

Piedmont Lithium (PLL)

a group of connected batteries

Source: Shutterstock

Another one of the top-rated lithium stocks to consider is Piedmont Lithium (NASDAQ:PLL).

While it’s just as beaten-down and oversold as the others on this list, don’t write this one off either. For one, if its North Carolina mine permit is granted, the proposed mine could become one of North America’s largest sources of lithium for electric vehicle batteries.

Better, the company now holds all material permits for its new lithium project in Tennessee, where it expects to start construction this year. The Tennessee Lithium project, valued at $800 million, has a planned 30,000 tonnes capacity per year of lithium hydroxide. That triples current domestic production.

Piedmont also partnered with Vinland Lithium to advance a project in Newfoundland, Canada. 

So far, according to Chief Operating Officer Patrick Brindle, “Our team has visited the site on multiple occasions and conducted extensive due diligence. Early exploration results are favorable, and the project’s location is advantageous in terms of infrastructure and logistics.”

Standard Lithium (SLI)

Standard Lithium logo or icon on website page, Illustrative Editorial

Source: Postmodern Studio / Shutterstock.com

Another one of the top-rated lithium stocks to buy and hold for the long haul is Standard Lithium (NYSEAMERICAN:SLI).

Helping, late last year, the company claimed that its East Texas exploration site had the highest-grade lithium brine in North America.

“The grade of lithium brine is important for Standard Lithium since high brine grades have the potential to lower DLE (direct lithium extraction) costs for the company. Standard Lithium believes East Texas will become a substantially large contributor of high-grade brine for future production,” The Motley Fool’s Neha Chamaria added.

In addition, the company is targeting 2026 for the production of lithium carbonate at its plant in Arkansas. Even better for SLI, ExxonMobil (NYSE:XOM) acquired the rights to 120,000 gross acres of the Smackover formation in southern Arkansas. This could make SLI even more attractive, perhaps as an acquisition target.

Global X Lithium & Battery Tech ETF (LIT)

Illustration of an ETF in multiple sectors.

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Or, if you want to safely diversify with more top-rated lithium stocks, consider the Global X Lithium & Battery Tech ETF(NYSEARCA:LIT). At the moment, its chart is just as ugly, but give it time.

With lithium expected to come back strong, so will the LIT ETF, with patience. With an expense ratio of 0.75%, the ETF invests in the complete lithium cycle. Everything from mining and refining the metal through battery production. 

Some of its top holdings include Albemarle, Panasonic (OTCMKTS:PCRFY), BYD (OTCMKTS:BYDDF), Tesla (NASDAQ:TSLA), Piedmont Lithium and Standard Lithium.

Amplify Lithium & Battery Technology ETF (BATT)

An image of three glass piggy banks with ETF written on the sides on a table. the best ETFs

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There’s also the Amplify Lithium & Battery Technology ETF (NYSEARCA:BATT), another oversold fund that’s likely to come back strong with lithium prices. With an expense ratio of 0.59%, the BATT ETF provides exposure to global companies deriving material revenue from developing, producing and using lithium battery technology.

Some of its top holdings include Tesla, Albemarle, Sociedad Química y Minera de Chile S.A. and Panasonic.

On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.

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