Trimming Our Livent FVE to $17 on Lower Near-Term Profits; Shares Materially Undervalued
Livent saw lithium prices fall 11% during the first quarter versus a year ago, which was slightly above our expectations for lithium carbonate prices in 2019. However, a change in Chinese electric vehicle subsidy requirements has reduced lithium hydroxide demand in favor of lithium carbonate. As a result, the premium for lithium hydroxide over carbonate has eroded faster than our initial expectations, and we expect Livent to realize lower average prices over the next couple of years. Also, Liven...Livent manufactures lithium. The company's primary products, namely battery-grade lithium hydroxide, butyllithium and high purity lithium metal are inputs used in various applications. The company produces lithium compounds for use in applications that have specific performance requirements, including battery-grade lithium hydroxide for use in lithium-ion batteries. The company also supplies butyllithium, which is used as a synthesizer in the production of polymers and pharmaceutical products, as well as a range of specialty lithium compounds including high purity lithium metal, which is used in the production of lightweight materials for aerospace applications and non-rechargeable batteries.
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Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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