Update shared on 25 Nov 2025
Fair value Increased 8.89%Sociedad Química y Minera de Chile's analyst fair value estimate has increased from $52.03 to $56.66. Analysts cite stronger lithium demand forecasts and improved profit margins as the reasons for the upward revision.
Analyst Commentary
Recent analyst updates have highlighted both opportunities and risks for Sociedad Química y Minera de Chile, with price targets and ratings reflecting varying perspectives on the company’s outlook.
Bullish Takeaways- Bullish analysts have raised valuation targets in response to stronger forecasts for lithium demand. They anticipate growth from 1.5 million tons this year to over 1.7 million tons next year, and project 20 percent demand growth in 2025.
- Improved lithium price expectations have contributed to a positive outlook on future earnings and profit margins.
- The imminent resolution around the Codelco joint venture is seen as a potential catalyst that may close the company's valuation discount relative to its industry peers.
- Exposure to robust lithium demand is viewed as supporting healthy earnings growth going forward.
- Bearish analysts point to the company's significant exposure to Chilean lithium royalties, which could limit upside from higher market prices and constrain overall earnings uplift.
- Some have taken a more cautious stance by lowering ratings and price targets, reflecting concerns around execution and future growth relative to current valuation levels.
- There is a view that, despite favorable lithium market trends, execution risks and market competition could weigh on the company’s performance.
What's in the News
- The company maintained production guidance for 2025 and reaffirmed the forecast of 150,000 to 170,000 tons of spodumene concentrate at 5.5% grade. (Key Developments)
- The 2025 sales projection for lithium carbonate equivalent (LCE) increased to a range of 23,000 to 24,000 tons, up from the previous estimate of 20,000 tons. (Key Developments)
- The State Administration for Market Regulation of China approved the public-private partnership between SQM and Codelco for joint lithium development in the Atacama Salt Flat. This approval is subject to commitments on governance and fair supply terms to Chinese customers. (Key Developments)
Valuation Changes
- Fair Value Estimate has increased from $52.03 to $56.66, reflecting a higher outlook for the company’s intrinsic value.
- Discount Rate has declined slightly from 8.79% to 8.66%, indicating a modest reduction in perceived investment risk.
- Revenue Growth Projection has risen marginally from 15.62% to 15.97%, signaling greater expected expansion.
- Net Profit Margin has improved significantly from 28.21% to 34.58%.
- Future P/E Ratio has dropped from 10.35x to 8.88x, suggesting higher expected earnings relative to share price.
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