Hold Rating for Lithium Americas Corp. Amid Project Progress and Financial Uncertainties

Lithium Americas Corp. (LAC – Research Report), the Basic Materials sector company, was revisited by a Wall Street analyst on March 28. Analyst Joel Jackson from BMO Capital maintained a Hold rating on the stock and has a $3.50 price target.

Joel Jackson has given his Hold rating due to a combination of factors surrounding Lithium Americas Corp.’s current position and future prospects. The company’s Thacker Pass project is progressing, with detailed engineering over halfway complete and major construction milestones set for the coming years. However, the completion timeline extends to late 2027, with production expected to start in 2028, which introduces a degree of uncertainty and risk.
Additionally, while the financial backing from DOE and GM is in place, ensuring the continuation of the project, there are concerns about potential cost overruns and the impact of fluctuating commodity prices. The company’s cash position and expected funding from Orion are seen as sufficient to meet its obligations, but these factors contribute to a balanced risk/reward scenario. As such, the valuation does not currently justify a more bullish stance, leading to the Hold rating.

In another report released today, Scotiabank also maintained a Hold rating on the stock with a $2.75 price target.