SQM - BofA follows GS downgrading lithium - SQM to sell on election

Bank of America out with a ratings cut on Sociedad Quimica y Minera de Chila (NYSE:SQM), taking the Company down to sell following last night's landslide victory for "far left" presidential candidate Boric. Fears include higher taxes, interference in existing concessions, and the creation of a state-owned enterprise in charge of developing the lithium industry; all leading the analyst to reduce her EBITDA-valuation multiple from 14x to 8x 2022 earnings before interest, taxes, depreciation and amortization. The analyst is 30% above consensus EBITDA estimates for fiscal year 2022, but feels the policy overhang will drive shares lower medium term, regardless of financial performance. The market appears to agree with BofA, as the stock is off 14% this morning, with local index (BATS:ECH) down ~10%. This follows a bearish lithium pricing note, and downgrades from Goldman just last week.

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BofA follows GS downgrading lithium - SQM to sell on election