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Sociedad Quimica Y Minera (SQM)
:SQM
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Sociedad Quimica Y Minera SA
(NYSE:SQM)
Rating:64Neutral
Price Target:
$39.00
▲(7.94% Upside)
Positive Factors
Commodity Markets
SQM is benefiting from very strong iodine markets and improving potash fertilizer markets.
Market Appeal
The road to Chilean elections provides support to SQM shares, with the MSCI Chile index up 19.6% in US$ terms, making Chile a more appealing destination for investors.
Strategic Agreements
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 Projections
Lower lithium volume and lower lithium ASP have led to a reduction in 2025E EBITDA expectations.
Political Uncertainty
The leading candidates running for president in Chile have publicly opposed the deal between Codelco and SQM, mainly alleging lack of transparency.
Price Volatility
Global lithium remains mixed, with prices expected to decline and order backlogs stalling, affecting the overall sentiment in the lithium market.
Sociedad Quimica Y Minera SA (SQM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$10.07B
Dividend Yield0.47%
Average Volume (3M)1.63M
Price to Earnings (P/E)17.2
Beta (1Y)0.70
Revenue Growth-29.03%
EPS Growth52.74%
CountryUS
Employees8,344
SectorBasic Materials
Sector Strength57
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)0.48
Shares Outstanding142,818,910
10 Day Avg. Volume1,561,750
30 Day Avg. Volume1,630,499
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.37
Enterprise Value/Revenue3.07
Enterprise Value/Gross Profit10.93
Enterprise Value/Ebitda12.74
Forecast
1Y Price Target
$42.58Price Target Upside17.85% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Sociedad Quimica Y Minera SA Business Overview & Revenue Model
Company DescriptionSociedad Quimica Y Minera SA (SQM) is a Chilean multinational corporation that operates in the chemicals and mining sectors. It is one of the world's largest producers of lithium, iodine, and potash, among other industrial chemicals. SQM's core products are essential for various industries, including agriculture, health, and electronics, serving a global customer base with high-quality chemical solutions.
How the Company Makes MoneySQM generates revenue primarily through the production and sale of lithium, iodine, and plant nutrients. Lithium is a crucial component in battery production for electric vehicles and electronic devices, making it a significant growth driver for the company. Iodine is used in medical applications and various industrial processes, contributing to the company's diverse revenue streams. Additionally, SQM produces specialty plant nutrients that enhance agricultural productivity, further broadening its market reach. The company also benefits from strategic partnerships and joint ventures that enhance its production capabilities and market access, particularly in the expanding lithium market. These factors, along with its established global distribution network, enable SQM to maintain a strong financial performance.
Sociedad Quimica Y Minera SA Earnings Call Summary
Earnings Call Date:May 27, 2025
(Q1-2025)
| % Change Since: 9.55%|
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 showcases solid operational margins and a strong balance sheet with moderate leverage. Despite recent revenue and profit declines, the company maintains healthy cash flow and profitability ratios. Continued focus on improving revenue growth and net income will be essential for sustaining financial strength.Income Statement
The company shows a strong gross profit margin of 28.12% and an EBIT margin of 22.25% for TTM, indicating good operational efficiency. However, the revenue growth rate is negative compared to previous periods, and net profit margin is reduced at 13.45% due to a decline in net income. EBITDA margin remains healthy at 24.13%, demonstrating stable earnings before non-cash items.65
Positive
Balance Sheet
The balance sheet reflects a stable equity ratio of 45.73%, suggesting a solid financial base. The debt-to-equity ratio is moderate at 0.90, indicating manageable leverage. Return on equity is strong at 11.47%, showing effective use of equity to generate profits, although a reduction from past years.70
Positive
Cash Flow
Operating cash flow to net income ratio is positive at 2.22, indicating sound cash generation capability relative to net income. However, free cash flow growth is modest with a TTM increase, and free cash flow to net income ratio is at 0.60, reflecting limited cash available for expansion or dividends.60
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 |
| EBITDA | 1.17B | 3.23B | 5.80B | 1.13B | 516.62M |
| Net Income | -404.36M | 2.01B | 3.91B | 585.45M | 164.52M |
Balance Sheet | |||||
| Total Assets | 11.50B | 11.71B | 10.82B | 7.04B | 4.82B |
| Cash, Cash Equivalents and Short-Term Investments | 2.44B | 2.36B | 3.61B | 2.42B | 854.56M |
| Total Debt | 4.82B | 4.55B | 2.91B | 2.61B | 1.95B |
| 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
Negative
36.13
Price Trends
35.44
Positive
36.27
Negative
37.61
Negative
Market Momentum
0.24
Positive
45.20
Neutral
6.53
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SQM, the sentiment is Negative. The current price of 36.13 is below the 20-day moving average (MA) of 38.32, above the 50-day MA of 35.44, and below the 200-day MA of 37.61, indicating a neutral trend. The MACD of 0.24 indicates Positive momentum. The RSI at 45.20 is Neutral, neither overbought nor oversold. The STOCH value of 6.53 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (44)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | $7.94B | 11.10 | 11.73% | ― | -2.34% | 89.86% | |
64 Neutral | $10.07B | 17.25 | 12.13% | 0.47% | -29.03% | 52.74% | |
63 Neutral | $7.05B | 8.62 | 14.52% | 5.38% | 1.60% | -3.97% | |
61 Neutral | $30.38B | 40.24 | 0.31% | 2.18% | 4.51% | -121.68% | |
55 Neutral | $23.93B | 18.80 | 16.88% | 2.57% | -10.59% | -7.79% | |
53 Neutral | $8.03B | ― | -8.66% | 2.39% | -33.05% | -97.63% | |
44 Neutral | C$863.02M | -6.77 | -14.90% | 2.78% | 16.54% | -27.01% |
* Basic Materials Sector Average
Performance Comparison
SQM
Sociedad Quimica Y Minera SA
36.13
0.15
0.42%
ALB
Albemarle
68.25
-11.91
-14.86%
EMN
Eastman Chemical
61.39
-30.68
-33.32%
PPG
PPG Industries
106.02
-10.48
-9.00%
DD
DuPont de Nemours
72.60
-4.36
-5.67%
AVTR
Avantor
11.64
-13.34
-53.40%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.