Sigma Lithium Corporation (NASDAQ:SGML) stock fell Thursday after Bank of America Securities (BofA) turned more bearish, warning that unresolved operational delays and liquidity uncertainty are overshadowing any rebound in lithium prices and limiting the company’s ability to deliver meaningful near-term production.
BofA analyst Rock Hoffman downgraded the company from Neutral to Underperform and raised the price forecast from $11 to $13.
The analyst’s bearish stance reflects the company’s unresolved operational and liquidity challenges.
Details
Management has not yet provided clarity on the restart of mining operations or the receipt of prepayment funds, both of which are critical for alleviating balance sheet concerns, adds the analyst.
Despite a 158% rally since the November 14 earnings call on stronger lithium fundamentals, the analyst sees more downside risk, arguing the stock now prices in large, successful mining volumes even though the company has made little progress resolving its key operational and liquidity issues.
The analyst writes that delays in P1 could affect the timing of P2, further impacting the company’s ability to capitalize on strong returns through optimal production.
Although the outlook on lithium has improved due to production discipline, lower ore recoveries, and strong ESS demand, SGML cannot benefit from higher prices without consistent production, notes the analyst.
Hoffman writes that even with a mid-January restart, meaningful volumes in the first quarter of fiscal 2026 will be limited.
Estimates Revision
The analyst now forecasts fiscal 2026 concentrate sales at 210kt SC5 (down from 298kt), but lower first-quarter costs, higher second-quarter and fourth-quarter prices, and 190kt of tailings sales could help offset volume shortfalls, lifting 2026 EBITDA to $97 million from $85 million.
Consequently, the analyst revised the EPS estimate to a loss of 15 cents (from a loss of 21 cents prior) for 2025, 51 cents (from 46 cents) for 2026, and 78 cents (from 73 cents) for 2027.
SGML Price Action: Sigma Lithium shares were down 15.29% at $13.26 at the time of publication on Thursday, according to Benzinga Pro data.
Photo by T. Schneider via Shutterstock
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