Livent downgraded to Neutral from Overweight at Piper Sandler

Piper Sandler downgraded Livent to Neutral from Overweight with a price target of $19, down from $33. The analyst cites challenges in electric vehicle manufacturing and demand for the downgrade, saying it may “conspire to significantly degrade” lithium’s supply/demand dynamics. Piper re-evaluated the appropriate valuation multiples for lithium-based stocks in light of an updated long-term outlook for the industry, its growth environment and the likely endgame for lithium as a product. The firm believes “widespread downstream issues” for the product owing to slowing EV demand growth driven by macroeconomic factors and a relatively faster rate of lithium supply growth will take the lithium market to a “balanced to long situation versus estimates of a decidedly short situation” as recently as six months ago. As such, Piper thinks lithium prices may remain under pressure and the company’s earnings growth may suffer.