Livent (NYSE:LTHM), a company focused on lithium-based power systems, slipped 2% in premarket trading after the company announced a new release of shares. The slip continued into this morning's trading session as well. The new shares are set to be priced below yesterday's closing price, a move the market seemed unhappy with. While financial analysts share the market's skepticism, there are signs that the overall pool is swinging toward a more bullish outlook overall.
Livent's New Share Plan Leaves Investors Flat
The Livent Corporation announced that it has begun an underwritten public offering of new shares. The company is releasing 12.5 million shares of common stock, and is offering the underwriters a 30-day option in which the underwriters can buy up to an extra 1.875 million shares of common stock as well. The underwriters' representatives, as well as book-running managers, in this case, are Goldman Sachs & Co. LLC, as well as J.P. Morgan Securities LLC.
With the proceeds of said sale, Livent plans to engage in “general corporate purposes,” as well as repaying debts already incurred as well as bolstering its capital spending. The shares are set to be sold at $17.50 per share, which is actually below yesterday's closing price of $18.90 per share.
As of March 2021, reports note, Livent had a debt load of $298.9 million, which was up substantially from the $211.1 million seen a year prior. The company also had $21.5 million in cash and $106.8 million in receivables due within a 12-month period. With a current market capitalization of $2.56 billion, however, Livent's debt load isn't proving a concern to some analysts.
What Do Financial Analysts Think About Livent Stock?
Financial analysts, meanwhile, are cautious toward Livent stock overall, though there are signs that the broader pool is swinging toward more bullish sentiment. Our latest research finds the company has a consensus rating of “hold”, though the ratios making up that “hold” have changed over the last few months. The Livent stock forecast seems to be improving overall.
A year ago, the Livent corporation had seven “hold” ratings and two “sell” ratings to its credit. Six months ago, the company had two “buy” ratings, along with eight “hold” and one “sell”. Today, we're now at four “buy” ratings, seven “hold” and one “sell.” Sellers and holders are both in clear decline, though at a very slow rate, while the “buy” interest is on the rise.
As for the Livent price target, it's in a fairly narrow range. The current consensus price target is $17.91, with a low of $7 per share and a high of $24.
There has been very little movement of late in the analyst pool, with the latest move coming in on April 19 from Evercore ISI. Evercore upgraded Livent from “in-line” to “outperform,” and with that upgrade also boosted the price target from $20 to $22. Prior to that, back in March, there were three investor moves that were all comparatively neutral for the company. Credit Suisse reiterated its “neutral” rating with a price target of $14. Meanwhile, both Cowen and B. Riley initiated coverage on the company, both effectively declaring it a “hold”; Cowen called it a “market perform” and B. Riley's rating was “neutral.” Both established price targets of $19.
There's one more analyst point to consider that's much more unusual; a report out from Q.ai released in Forbes noted that Livent had spent three consecutive days as one of Q.ai's “top shorts.” The report noted that, while Livent's product line of chemical manufacturing and lithium technologies were “very in-demand”, the company faltered on several points of rating. Q.ai's artificial intelligence systems rated the company a “C” in technicals, a “D” in growth, and an “F” in both low volatility momentum and quality value.
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