Goldman Downgrades SQM as Stock Performance Outpaces Fundamentals
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 04 2025
0mins
Should l Buy SQM?
Source: SeekingAlpha
Stock Downgrade: Sociedad Quimica y Minera de Chile (SQM) shares fell 4.5% after Goldman Sachs downgraded the stock from Buy to Neutral, citing lower than expected lithium prices and a price target of $63.
Price Expectations: Analyst Marcio Farid noted that SQM's stock is currently pricing in lithium carbonate at ~$18,000/ton, significantly above both spot prices and Goldman's long-term expectations of $9,250-$11,500/ton.
Investment and Cash Flow: SQM is expected to maintain high capital expenditures as it invests in lithium growth and iodine capacity expansion, which may pressure free cash flow generation in 2026-27.
Operational Strengths: Despite the downgrade, Farid highlighted SQM's strong operational performance in lithium production and profitability in iodine, suggesting the company is well-positioned for future market balance and price recovery.
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Analyst Views on SQM
Wall Street analysts forecast SQM stock price to fall
9 Analyst Rating
3 Buy
5 Hold
1 Sell
Hold
Current: 70.110
Low
43.50
Averages
64.28
High
80.00
Current: 70.110
Low
43.50
Averages
64.28
High
80.00
About SQM
Sociedad Quimica y Minera de Chile SA (SQM), is a producer of potassium nitrate and iodine. The Company produces specialty plant nutrients, iodine derivatives, lithium and its derivatives, potassium chloride, potassium sulfate and certain industrial chemicals. Its segments include specialty plant nutrients, industrial chemicals, iodine and derivatives, lithium and derivatives, potassium, and other products and services. Specialty plant nutrients are fertilizers that enable farmers to improve yields. Industrial chemicals have a range of applications in chemical processes, such as the manufacturing of glass and industrial nitrates. Iodine and its derivatives are used in the X-ray contrast media and biocides industries, among others. Lithium and its derivatives are used in batteries, greases and frits for production of ceramics. Potassium chloride is a commodity fertilizer that is produced and sold by the Company across the world.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Tianqi Lithium Plans to Sell Stake in SQM
- Stake Sale Announcement: Tianqi Lithium Corp. plans to sell up to a 1.25% stake in Chilean lithium producer SQM, which translates to approximately 3.57 million Class A shares with a carrying value of around $206 million, indicating a potential exit from what was once a strategic investment.
- Board Approval: The company's board has approved the possible sale of its entire holding, which not only signifies a shift in strategic focus away from SQM but could also impact its competitive position in the global lithium market.
- Timing Strategy: Tianqi stated it would dispose of the shares “at an appropriate time,” a strategy that may aim to maximize returns while navigating current market volatility and geopolitical risks.
- Industry Context: SQM's strong position in lithium production, highlighted by its recent merger with Codelco and collaboration with Ivanhoe Electric, may influence Tianqi's decision-making, reflecting increased competition and opportunities for partnerships within the industry.
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- Merger Completion: SQM's merger with Codelco's lithium unit was finalized on Tuesday after the Chilean Supreme Court dismissed an appeal that had delayed the transaction, marking a significant consolidation in the lithium sector.
- Production Control: The merger enables both companies to produce lithium in Chile's Atacama salt flat until 2060, aligning with the Chilean government's strategy to increase state control over the lithium industry and significantly boost production capacity.
- Historic Deal: This transaction is recognized as the largest public-private partnership in Chile's history, allowing Codelco to effectively control lithium production from one of the world's richest salt flats, which is crucial for the global energy transition.
- Enhanced Market Position: The merger positions SQM to strengthen its role in the global lithium market, enhancing Chile's significance in lithium production and supporting the advancement of renewable energy initiatives.
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- Funding Commitment: SQM will provide an initial funding of $9 million for the collaboration covering 2,002 square kilometers of mining concessions in the Atacama Desert, reflecting its commitment to copper resource development and expectations for future market demand.
- Potential Gains: Upon identifying qualifying copper deposits of at least 1 million metric tons of contained copper or equivalent, Ivanhoe Electric will have the option to acquire a 50% interest by paying twice SQM's exploration expenditures, forming a 50-50 joint venture that enhances its competitive position in the copper market.
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- Market Outlook: As demand for electric vehicles and renewable energy continues to rise, the market demand for lithium is expected to grow, driving performance improvements for these companies and enhancing their competitiveness in the global market.
- Investment Opportunities: Analysts note that the potential of the lithium industry is attracting more investor attention, particularly against the backdrop of advancing battery technologies, which could enable these companies to capture larger market shares.
- Future Prospects: With improvements in the development and utilization efficiency of lithium resources, Albemarle, SQM, and Lithium Americas are poised to benefit from the ongoing growth of the industry in the coming years, further solidifying their market positions.
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- Investor Community Building: The Motley Fool encourages investors to join its community for the latest investment advice and stock recommendations; although Albemarle did not make the recommended list, other potential stocks are worth considering.
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Tianqi Lithium Plans to Sell Stake in SQM
- Stake Sale Announcement: Tianqi Lithium Corp. plans to sell up to a 1.25% stake in Chilean lithium producer SQM, which translates to approximately 3.57 million Class A shares with a carrying value of around $206 million, indicating a potential exit from what was once a strategic investment.
- Board Approval: The company's board has approved the possible sale of its entire holding, which not only signifies a shift in strategic focus away from SQM but could also impact its competitive position in the global lithium market.
- Timing Strategy: Tianqi stated it would dispose of the shares “at an appropriate time,” a strategy that may aim to maximize returns while navigating current market volatility and geopolitical risks.
- Industry Context: SQM's strong position in lithium production, highlighted by its recent merger with Codelco and collaboration with Ivanhoe Electric, may influence Tianqi's decision-making, reflecting increased competition and opportunities for partnerships within the industry.
See More
SQM Completes Merger with Codelco's Lithium Unit
- Merger Completion: SQM's merger with Codelco's lithium unit was finalized on Tuesday after the Chilean Supreme Court dismissed an appeal that had delayed the transaction, marking a significant consolidation in the lithium sector.
- Production Control: The merger enables both companies to produce lithium in Chile's Atacama salt flat until 2060, aligning with the Chilean government's strategy to increase state control over the lithium industry and significantly boost production capacity.
- Historic Deal: This transaction is recognized as the largest public-private partnership in Chile's history, allowing Codelco to effectively control lithium production from one of the world's richest salt flats, which is crucial for the global energy transition.
- Enhanced Market Position: The merger positions SQM to strengthen its role in the global lithium market, enhancing Chile's significance in lithium production and supporting the advancement of renewable energy initiatives.
See More
Ivanhoe Electric Partners with SQM for Copper Exploration in Chile
- Collaboration Agreement: Ivanhoe Electric has signed a three-year collaboration agreement with Sociedad Química y Minera de Chile (SQM) to explore copper deposits in northern Chile using Typhoon geophysical survey technology, marking a strategic partnership in resource development.
- Funding Commitment: SQM will provide an initial funding of $9 million for the collaboration covering 2,002 square kilometers of mining concessions in the Atacama Desert, reflecting its commitment to copper resource development and expectations for future market demand.
- Potential Gains: Upon identifying qualifying copper deposits of at least 1 million metric tons of contained copper or equivalent, Ivanhoe Electric will have the option to acquire a 50% interest by paying twice SQM's exploration expenditures, forming a 50-50 joint venture that enhances its competitive position in the copper market.
- Geological Challenges Addressed: The exploration area is located on major copper belts but is concealed beneath electrically resistive caliche cover that hinders traditional exploration methods; Ivanhoe Electric's technological innovations will help overcome these challenges and improve exploration efficiency.
See More
Lithium Industry Update: Albemarle, SQM, and Lithium Americas Benefit
- Industry Dynamics: The lithium industry is undergoing significant changes, with stock prices for Albemarle, SQM, and Lithium Americas rising by 0.91%, 2.36%, and 4.32% respectively, reflecting market optimism about increasing lithium demand.
- Market Outlook: As demand for electric vehicles and renewable energy continues to rise, the market demand for lithium is expected to grow, driving performance improvements for these companies and enhancing their competitiveness in the global market.
- Investment Opportunities: Analysts note that the potential of the lithium industry is attracting more investor attention, particularly against the backdrop of advancing battery technologies, which could enable these companies to capture larger market shares.
- Future Prospects: With improvements in the development and utilization efficiency of lithium resources, Albemarle, SQM, and Lithium Americas are poised to benefit from the ongoing growth of the industry in the coming years, further solidifying their market positions.
See More
Albemarle Excluded from Top Picks; Analysts Recommend 10 Stocks
- Industry Dynamics: As of January 22, 2026, the lithium industry's developments have significantly impacted Albemarle (NYSE: ALB), SQM (NYSE: SQM), and Lithium Americas (NYSE: LAC), with analysts expressing caution regarding their future prospects.
- Investment Recommendation Update: The Motley Fool analyst team highlighted that Albemarle was not included in the current list of top 10 stocks, reflecting market concerns about its future performance, which may affect investor confidence.
- Historical Return Comparison: Motley Fool's Stock Advisor has achieved an average total return of 937% since its inception, significantly outperforming the S&P 500's 195%, indicating the strength of its stock recommendations and the need for investors to choose wisely.
- Investor Community Building: The Motley Fool encourages investors to join its community for the latest investment advice and stock recommendations; although Albemarle did not make the recommended list, other potential stocks are worth considering.
See More
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U.S. Rare Earth Stocks Performance: U.S. listed rare earth stocks have shown significant gains, with an increase of over 22%.
Critical Metals Surge: Critical metals have risen by more than 20%, indicating strong market demand.
TMC Metals Growth: TMC Metals has experienced an 11% increase, reflecting positive trends in the sector.
MP Materials Rise: MP Materials has seen an increase of more than 8%, driven by project progress news.
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