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Livent Corp LTHM

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Raising Our FVE for Livent to $19 on Solid Second-Quarter Results; Shares Slightly Overvalued

Seth Goldstein, CFA Senior Equity Analyst

Analyst Note

| Seth Goldstein, CFA |

Livent reported strong second-quarter results. Adjusted EBITDA soared 150% year on year versus the prior-year quarter on higher lithium prices and volumes. We have increased our near-term outlook for lithium profits, driven by higher prices as Livent should benefit from higher lithium spot prices in the second half of the year. Separately, we have increased our effective tax rate forecast to incorporate our assumptions for a higher U.S. corporate tax rate. After incorporating these changes, we are raising our Livent fair value estimate to $19 per share from $18. Our narrow moat rating is unchanged.

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Company Profile

Business Description

Livent is a pure-play lithium producer formed when FMC spun off its lithium business in October 2018. Livent should benefit from increased lithium demand via higher electric vehicle adoption, as lithium is a key component of EV batteries. The company's low-cost lithium carbonate production comes from brine resources in Argentina. Livent also operates downstream lithium hydroxide conversion plants in the United States and China and has a 25% stake in a fully integrated Canadian lithium project.

Contact
2929 Walnut Street
Philadelphia, PA, 19104
T +1 215 299-5900
Sector Basic Materials
Industry Specialty Chemicals
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Distressed
Employees 906

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