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Arcadio Lithium (New York Stock Exchange: ALTM) closed -9.6% In trading on Tuesday, one of several alternative energy stocks posted fresh 52-week lows as a wave of bearish sentiment sent the energy sector into broad losses.
Vistra (VST) and Constellation Energy (CEG)) comprised two of the three biggest losers of the day in the S&P 500, -11.3% and -9.6% respectively.
Also falling to fresh 52-week lows: Ascent Solar Technologies (ASTI) -19.5%Ballard Power Systems (BLDP) -4.9%Intermittent charging (BLNK) -8%Canadian Solar Energy Corporation (CSIQ) -3%Fuel Cell Energy (FCEL) -4.9%Li-Cycle Holdings (LICY) -7.2%Power plug (PLUG) -6.9%TETRA Technologies (TTI) -5.6%Workhorse (WKHS) -9.3%.
Arcadium Lithium (ALTM) was initiated with a Neutral rating and a $3 price target at UBS, saying lower lithium prices are likely to delay expansions until later in the decade, according to analyst Joshua Spector.
The bank’s updated lithium outlook indicates that Chinese prices could remain near $10 per kilo for the next two years as supply from China and Africa continues to add at lower cost than anticipated and low-cost Western supply continues to increase.
Spector says his 2025-26 Arcadium EBITDA estimate (ALTM) is 20%-26% below consensus, “a near-term negative, but with our forecasts closer to spot prices, the market may already be there.”
UBS has a more constructive view on Arcadium (ALTM) in the long term, but does not believe the market will give credence to potential capacity expansions or higher lithium prices until the current period of oversupply is overcome, likely not until at least 2026.