Cautious Hold Rating on Thacker Pass Project Amid Labor and Cost Concerns

Lithium Americas Corp. (LAC – Research Report), the Basic Materials sector company, was revisited by a Wall Street analyst yesterday. Analyst Joel Jackson from BMO Capital reiterated a Hold rating on the stock and has a $3.50 price target.

Joel Jackson’s rating is based on a combination of factors including the current progress and future risks associated with the Thacker Pass project. While the construction is advancing well with detailed engineering nearing completion and significant capital expenditure already committed, there are notable concerns about labor availability and costs. The necessity to significantly increase the workforce by 2025 and 2026 poses a risk to staying on schedule and within budget.
Additionally, while funding from the DOE and GM is secured, which supports the project’s continuation, there are uncertainties regarding tariff exposures and potential additional costs for a future conversion plant. The valuation and risk-reward profile, considering lithium price levels and operational risks, contribute to the Hold rating. These factors collectively suggest a cautious approach, justifying the neutral stance on the stock.