Wall Street Favorites: 3 Lithium Stocks With Strong Buy Ratings for January 2024

Stocks to buy

Lithium stocks have taken a beating due to oversupply concerns and a slowdown in electric vehicle (EV) sales. But don’t give up on them yet. If the Federal Reserve cuts interest rates as expected, we could see a resurgence of EV sales and a massive comeback for some of the most trod-upon lithium stocks.

In addition, I noted the following on Jan. 21.

“With some lithium mines shutting down or reducing production we could see less supply. This could help stabilize prices and send lithium prices higher with demand. All of which could be good news for some of the industry’s top-rated lithium stocks.”

Therefore, let’s consider these top lithium names with strong buy ratings this month.

Albemarle (ALB)

Source: IgorGolovniov/Shutterstock.com

The last time I mentioned Albemarle (NYSE:ALB), I said, “Not only is ALB now trading at less than half of growth, with a price-to-earnings-growth ratio of 0.43, it’s trading at just 4x earnings.” That was also on Jan. 21, as ALB traded at $117.56. Today, ALB is up to $123.20.

While that’s not a significant win just yet, give it time. Bouncing from double bottom support, I’d like to see the ALB stock challenge $150 again shortly. Further, RBC Capital maintained a buy rating on the ALB stock, with a price target of $163. Plus, we have to remember that ALB has significant clout in the lithium market, which should benefit once the EV boom resumes.

With ALB, buy the fear. It’s overdone.

Standard Lithium (SLI)

Source: Postmodern Studio / Shutterstock.com

Oversold shares of Standard Lithium (NYSEAMERICAN:SLI) are showing signs of life, too. Currently trading at $139, I’d like to see it retest $2.25 in the short term. 

There are a few positives for Standard Lithium. One, in October, the company uncovered the highest confirmed lithium grade brine in east Texas. Two, it’s targeting 2026 for production at its Arkansas plant. And three, the company is operating in the same Smackover region where Exxon Mobil (NYSE:XOM) recently acquired 120,000 gross acres of property.

Most recently, it’s working to complete its Definitive Feasibility Study (DFS) for its South West Arkansas project. In fact, as noted in a company press release:

“The SWA Project is expected to be one of the world’s first commercial scale DLE projects located in the Smackover Formation in the heartland of America in southwest Arkansas. The recently completed PFS for the SWA Project demonstrated robust economics and the potential to produce up to 35,000 tonnes per annum of battery-quality lithium hydroxide over a 20-year operating life. SWA includes some of the highest reported lithium brine concentrations in North America with a maximum lithium grade of 597 mg/L and an average of 437 mg/L.”

Sigma Lithium (SGML)

Source: Shutterstock

Sigma Lithium’s (NASDAQ:SGML) isn’t much to write home about just yet, but give it time. At the moment, it’s in talks with Chinese EV company BYD. The latter looks to expand its battery business, all as BYD business continues to accelerate. In fact, as noted by Electrek.co, BYD’s Brazil head, Alexandre Baldry, said discussions are being held regarding a possible supply agreement, joint venture, or acquisition.

Even better, Sigma has had an “incredible journey over the past twelve months, having gone from commissioning the crushing unit in December of 2022 on schedule and on budget, to sustaining nameplate production levels at its Greentech lithium concentrate plant in December 2023. Operating rates at these levels would support a monthly shipment cadence of roughly 22,000 tonnes through the course of 2024, annualizing approximately 270,000 tonnes of Quintuple Zero Green Lithium concentrate,” as noted in a recent press release.

On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.

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