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Sociedad Quimica Y Minera SA (SQM)
NYSE:SQM
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Sociedad Quimica Y Minera SA
(NYSE:SQM)
Rating:48Neutral
Price Target:
$31.00
▼(-4.02%Downside)
Positive Factors
Long-term Strategy
SQM's deal with Chile’s national miner Codelco to extend the Atacama lithium concession from 2030 to 2060 is key to the long-term future of the company.
Market Opportunities
SQM is seeing other benefits from very strong iodine markets and improving potash fertilizer markets.
Partnerships and Deals
The potential completion of the deal with Codelco and the stabilization of the lithium market are key to removing uncertainties around SQM and driving the shares.
Negative Factors
Financial Performance
Lower lithium volume and lower lithium ASP have led to a reduction in 2025E EBITDA expectations.
Market Sentiment
Global lithium remains mixed, with prices expected to decline and order backlogs stalling, affecting the overall sentiment in the lithium market.
Production and Sales
Lower lithium volume is expected, impacting 2025 EBITDA projections.
Sociedad Quimica Y Minera SA (SQM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.67B
Dividend Yield0.47%
Average Volume (3M)900.40K
Price to Earnings (P/E)15.2
Beta (1Y)0.53
Revenue Growth-28.74%
EPS Growth53.25%
CountryUS
Employees8,344
SectorBasic Materials
Sector Strength67
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)0.48
Shares Outstanding142,818,910
10 Day Avg. Volume1,103,628
30 Day Avg. Volume900,402
Financial Highlights & Ratios
PEG Ratio0.95
Price to Book (P/B)1.93
Price to Sales (P/S)0.00
P/FCF Ratio32.72
Enterprise Value/Market Cap1.53
Enterprise Value/Revenue0.63
Enterprise Value/Gross Profit9.99
Enterprise Value/Ebitda1.80
Forecast
1Y Price Target
$45.75Price Target Upside41.64% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
Sociedad Quimica Y Minera SA Business Overview & Revenue Model
Company DescriptionSociedad Quimica Y Minera SA (SQM) is a leading global supplier of specialty plant nutrients, iodine, lithium, and other industrial chemicals. Based in Chile, the company operates in various sectors including agriculture, health, technology, and energy. SQM's core products include lithium carbonate and lithium hydroxide for electric vehicle batteries, potassium nitrate for fertilizers, and iodine for medical and industrial applications.
How the Company Makes MoneySQM generates revenue primarily through the extraction, production, and sale of lithium, specialty plant nutrients, iodine, and industrial chemicals. The company's key revenue streams include lithium products, which are in high demand for electric vehicle batteries, driving substantial sales growth. Additionally, SQM capitalizes on the agricultural sector by providing specialty plant nutrients like potassium nitrate and potassium sulfate that enhance crop yields. Iodine products also contribute significantly to its earnings, serving essential roles in pharmaceuticals and industrial applications. Strategic partnerships and long-term contracts with major global companies in the electric vehicle and agricultural sectors further bolster SQM's financial performance, ensuring steady demand for its diverse product offerings.
Sociedad Quimica Y Minera SA Earnings Call Summary
Earnings Call Date:May 27, 2025
(Q1-2025)
| % Change Since: -2.06%|
Next Earnings Date:Aug 20, 2025
Earnings Call Sentiment Neutral
SQM reported strong operational performance with record lithium sales and robust growth in the Iodine and Specialty Plant Nutrition segments. However, the company faced challenges with declining lithium prices and political noise in Chile. Despite these hurdles, SQM remains confident in its market positioning and future growth plans.Q1-2025 Updates
Positive Updates
Record Lithium Sales Volumes
Achieved the highest first quarter lithium sales volumes in company history, driven by a 20% year-on-year increase due to strong demand from the electric vehicles market in China and Europe.
Strong Iodine Business Performance
Iodine prices reached a record average amidst tight supply and steady demand, driven by X-ray contrast media applications. The seawater pipeline construction is advancing rapidly to expand production capacity.
Specialty Plant Nutrition Growth
Sales volumes for Specialty Plant Nutrition grew at a healthy pace with upward trends in prices due to strong demand for potassium chloride and some supply disruptions.
Progress in Mt. Holland Operations
Production of spodumene concentrate at Mt. Holland is progressing well, and the commissioning of the Kwinana refinery is moving forward with expectations to see the first product in the coming months.
Negative Updates
Decline in Lithium Prices
Lithium prices have started to decline over the past few weeks, expected to result in lower average realized prices in the second quarter of 2025.
Challenges with Potassium Business
As anticipated, potassium volumes were significantly lower compared to the same period last year due to the strategy to prioritize high lithium content brands and more value-added products.
Lower Anticipated Lithium Volume
Given the current market conditions and geopolitical and trade tensions, there is uncertainty about achieving the previously forecasted 15% growth in lithium sales.
Political Noise in Chile
Concerns over political noise and debates in Chile regarding the Codelco JV, although the company remains confident about the eventual execution of the transaction.
Company Guidance
During the SQM First Quarter 2025 Earnings Conference Call, the company provided guidance on various metrics. They reported achieving the highest first-quarter lithium sales volumes in their history, with a 20% year-on-year increase, primarily driven by strong demand from the electric vehicle market in China and Europe. Despite stable lithium prices in Q1, a recent decline is expected to lower average realized prices in Q2. In Chile, capacity expansions aim to reach 240,000 metric tons of lithium carbonate and 100,000 metric tons of lithium hydroxide. The Iodine business also performed strongly, with record prices driven by demand for X-ray contrast media applications. Specialty Plant Nutrition sales volumes grew, supported by strong demand for potassium chloride. However, potassium volumes declined as the company prioritized high lithium content products. SQM remains confident in its long-term strategy, focusing on capacity expansion, innovation, and sustainable growth despite a challenging pricing environment.Sociedad Quimica Y Minera SA Financial Statement Overview
Summary
Sociedad Quimica Y Minera SA faces financial challenges with declining revenues, negative net income, and increased leverage. Operational margins are under pressure, and cash flow generation is weak. However, the company maintains a solid asset base and equity, providing some resilience in the short term. Strategic efforts are needed to stabilize revenue and improve profitability.Income Statement
Sociedad Quimica Y Minera SA has experienced a significant decline in revenue from $7.47 billion in 2023 to $4.53 billion in 2024, indicating a negative revenue growth trend. The net profit margin is negative in 2024 due to a net loss, reflecting profitability challenges. While EBIT and EBITDA margins remain relatively strong, they have decreased compared to prior years, indicative of reduced operational efficiency.45
Neutral
Balance Sheet
The company exhibits a moderate debt-to-equity ratio, which increased from 0.82 in 2023 to 0.93 in 2024, indicating higher leverage. The equity ratio decreased slightly, suggesting a minor reduction in financial stability. However, the company's total assets and equity remain substantial, providing a buffer against liabilities.60
Neutral
Cash Flow
The cash flow analysis shows a troubling trend with operating cash flow at zero in 2024, down from negative figures in 2023. Free cash flow is positive in 2024 but has significantly decreased from prior years, indicating challenges in generating cash from operations. The free cash flow to net income ratio is unfavorable due to the net loss in 2024.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.53B | 7.47B | 10.71B | 2.86B | 1.82B | Gross Profit |
| 1.33B | 3.07B | 5.74B | 1.09B | 482.87M | EBIT |
| 1.07B | 2.89B | 5.53B | 927.29M | 302.50M | EBITDA |
| 1.17B | 3.23B | 5.80B | 1.13B | 516.62M | Net Income Common Stockholders |
| -404.36M | 2.01B | 3.91B | 585.45M | 164.52M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 2.44B | 2.36B | 3.61B | 2.42B | 854.56M | Total Assets |
| 11.50B | 11.71B | 10.82B | 7.04B | 4.82B | Total Debt |
| 4.82B | 4.55B | 2.91B | 2.61B | 1.95B | Net Debt |
| 3.44B | 3.50B | 255.44M | 1.09B | 1.44B | Total Liabilities |
| 6.30B | 6.14B | 5.89B | 3.83B | 2.66B | Stockholders Equity |
| 5.16B | 5.53B | 4.90B | 3.18B | 2.12B |
| Cash Flow | Free Cash Flow | |||
| 302.89M | -1.28B | 3.00B | 357.80M | -140.01M | Operating Cash Flow |
| 1.27B | -178.29M | 3.91B | 822.52M | 182.23M | Investing Cash Flow |
| -1.21B | -1.48B | -909.40M | -1.01B | -167.09M | Financing Cash Flow |
| 282.38M | 47.91M | -2.00B | 1.21B | -94.13M |
Sociedad Quimica Y Minera SA Technical Analysis
Neutral
32.30
Price Trends
34.88
Negative
37.60
Negative
38.15
Negative
Market Momentum
-1.13
Positive
43.26
Neutral
54.57
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SQM, the sentiment is Neutral. The current price of 32.3 is below the 20-day moving average (MA) of 33.32, below the 50-day MA of 34.88, and below the 200-day MA of 38.15, indicating a bearish trend. The MACD of -1.13 indicates Positive momentum. The RSI at 43.26 is Neutral, neither overbought nor oversold. The STOCH value of 54.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SQM.
Sociedad Quimica Y Minera SA Risk Analysis
Sociedad Quimica Y Minera SA disclosed 50 risk factors in its most recent earnings report. Sociedad Quimica Y Minera SA reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Sociedad Quimica Y Minera SA Peers Comparison
Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $9.29B | 10.25 | 16.16% | 4.06% | 2.78% | 1.50% | |
66 Neutral | $8.96B | 12.70 | 12.52% | ― | -2.64% | 173.69% | |
64 Neutral | $25.41B | 18.85 | 18.47% | 2.43% | -7.67% | -0.58% | |
63 Neutral | $28.22B | 40.24 | 0.06% | 2.33% | 4.51% | -121.68% | |
51 Neutral | $6.71B | ― | -10.58% | 2.71% | -39.34% | -500.52% | |
51 Neutral | $2.02B | -1.12 | -21.36% | 3.65% | 2.87% | -30.54% | |
48 Neutral | $8.67B | 15.18 | 12.17% | 0.47% | -28.74% | 53.25% |
* Basic Materials Sector Average
Performance Comparison
SQM
Sociedad Quimica Y Minera SA
32.30
-14.77
-31.38%
ALB
Albemarle
58.64
-57.45
-49.49%
EMN
Eastman Chemical
78.34
-19.32
-19.78%
PPG
PPG Industries
111.26
-16.37
-12.83%
DD
DuPont de Nemours
67.41
-11.24
-14.29%
AVTR
Avantor
12.95
-11.12
-46.20%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.