Arcadium Lithium plc

ASX:LTM Stock Report

Market Cap: AU$8.8b

Arcadium Lithium Valuation

Is LTM undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of LTM when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: LTM (A$8.1) is trading below our estimate of fair value (A$59.67)

Significantly Below Fair Value: LTM is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for LTM?

Key metric: As LTM is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for LTM. This is calculated by dividing LTM's market cap by their current earnings.
What is LTM's PE Ratio?
PE Ratio36.7x
EarningsUS$155.10m
Market CapUS$5.69b

Price to Earnings Ratio vs Peers

How does LTM's PE Ratio compare to its peers?

The above table shows the PE ratio for LTM vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average26x
ORI Orica
16.7x8.4%AU$8.8b
DGL DGL Group
11x14.8%AU$158.3m
EVN Evolution Mining
23.9x9.6%AU$10.1b
MIN Mineral Resources
52.5x39.6%AU$6.6b
LTM Arcadium Lithium
36.7x29.8%AU$5.7b

Price-To-Earnings vs Peers: LTM is expensive based on its Price-To-Earnings Ratio (36.7x) compared to the peer average (26x).

Price to Earnings Ratio vs Industry

How does LTM's PE Ratio compare vs other companies in the Global Chemicals Industry?

37 CompaniesPrice / EarningsEstimated GrowthMarket Cap
LTM 36.7xIndustry Avg. 21.8xNo. of Companies190PE01632486480+
37 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: LTM is expensive based on its Price-To-Earnings Ratio (36.7x) compared to the Global Chemicals industry average (21.8x).

Price to Earnings Ratio vs Fair Ratio

What is LTM's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

LTM PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio36.7x
Fair PE Ratio39.1x

Price-To-Earnings vs Fair Ratio: LTM is good value based on its Price-To-Earnings Ratio (36.7x) compared to the estimated Fair Price-To-Earnings Ratio (39.1x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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