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Sociedad Quimica Y Minera SA (SQM)
NYSE:SQM

Sociedad Quimica Y Minera SA (SQM) AI Stock Analysis

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SQ

Sociedad Quimica Y Minera SA

(NYSE:SQM)

Rating:67Neutral
Price Target:
$37.00
▲(5.68%Upside)
SQM's overall stock score is supported by strong financial performance and positive sentiment from its recent earnings call, highlighting record lithium sales and growth in other segments. Valuation is reasonable, though technical indicators show mixed signals with potential resistance at higher levels. The company's confidence in its strategy amid external challenges also boosts its outlook.
Positive Factors
Long-term Prospects
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 Position
SQM is seeing other benefits from very strong iodine markets and improving potash fertilizer markets.
Strategic Partnerships
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 is expected, impacting 2025 EBITDA projections.
Market Conditions
Global lithium remains mixed, with prices expected to decline and order backlogs stalling, affecting the overall sentiment in the lithium market.
Pricing Pressure
Lower lithium volume and lower lithium ASP have led to a reduction in 2025E EBITDA expectations.

Sociedad Quimica Y Minera SA (SQM) vs. SPDR S&P 500 ETF (SPY)

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: 6.16%|
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 displays 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
65
Positive
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.
Balance Sheet
70
Positive
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.
Cash Flow
60
Neutral
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue4.48B4.53B7.47B10.71B2.86B1.82B
Gross Profit1.26B1.33B3.07B5.74B1.09B482.87M
EBITDA1.08B1.17B3.23B5.80B1.13B516.62M
Net Income602.68M-404.36M2.01B3.91B585.45M164.52M
Balance Sheet
Total Assets11.49B11.50B11.71B10.82B7.04B4.82B
Cash, Cash Equivalents and Short-Term Investments2.35B2.44B2.36B3.61B2.42B854.56M
Total Debt4.72B4.82B4.55B2.91B2.61B1.95B
Total Liabilities6.19B6.30B6.14B5.89B3.83B2.66B
Stockholders Equity5.25B5.16B5.53B4.90B3.18B2.12B
Cash Flow
Free Cash Flow361.96M302.89M-1.28B3.00B357.80M-140.01M
Operating Cash Flow1.34B1.27B-178.29M3.91B822.52M182.23M
Investing Cash Flow-1.18B-1.21B-1.48B-909.40M-1.01B-167.09M
Financing Cash Flow176.05M282.38M47.91M-2.00B1.21B-94.13M

Sociedad Quimica Y Minera SA Technical Analysis

Technical Analysis Sentiment
Positive
Last Price35.01
Price Trends
50DMA
33.75
Positive
100DMA
36.69
Negative
200DMA
37.87
Negative
Market Momentum
MACD
0.19
Negative
RSI
58.70
Neutral
STOCH
77.07
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SQM, the sentiment is Positive. The current price of 35.01 is above the 20-day moving average (MA) of 32.90, above the 50-day MA of 33.75, and below the 200-day MA of 37.87, indicating a neutral trend. The MACD of 0.19 indicates Negative momentum. The RSI at 58.70 is Neutral, neither overbought nor oversold. The STOCH value of 77.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (43)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
EMEMN
69
Neutral
$8.79B9.6616.16%4.38%2.78%1.50%
67
Neutral
$9.25B13.1112.52%-2.64%173.69%
SQSQM
67
Neutral
$9.58B16.7112.17%0.47%-28.74%53.25%
DDDD
64
Neutral
$28.45B40.240.06%2.37%4.51%-121.68%
PPPPG
64
Neutral
$25.71B19.1818.47%2.39%-7.67%-0.58%
ALALB
53
Neutral
$7.10B-10.58%2.54%-39.34%-500.52%
43
Neutral
AU$1.38B-6.10-40.62%4.25%-4.78%-43.21%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SQM
Sociedad Quimica Y Minera SA
35.01
-5.74
-14.09%
ALB
Albemarle
64.95
-28.62
-30.59%
EMN
Eastman Chemical
76.21
-18.28
-19.35%
PPG
PPG Industries
114.15
-8.86
-7.20%
DD
DuPont de Nemours
68.88
-10.01
-12.69%
AVTR
Avantor
13.53
-7.67
-36.18%
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.Date of analysis: Jun 25, 2025