New Lithium Americas Price Target Amid 'Massive Opportunity' in Nevada Mine
The U.S. government is investing in the company. Should you? Here are my thoughts.
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Sahes of Lithium Americas (LAC) blasted off on September 24 as reports circulated that the Trump administration was to seek an equity stake in the company as the terms of a $2.3 billion U.S. government loan were renegotiated. The company acknowledged that day that it was in talks with the Department of Energy and with General Motors (GM) with whom the firm is partnered up on its Thacker Pass lithium project in the state of Nevada.
Incredibly, the very same day, analyst David Deckelbaum, who is rated three stars out of five at TipRanks, of TD Cowan, downgraded LAC from a "Buy" rating down to a "Hold" while reiterating his $5 price target. In case readers thought that maybe Deckelbaum had prepared that piece the previous evening and released it ahead of the news that day, which can happen, he reiterated that "Hold" rating on October 1, so he owns it now. That was one day after Energy Secretary Chris Wright told Bloomberg News that the U.S. government had agreed to take a stake in the company.
The News
On Tuesday evening, Lithium Americas announced that it had reached an agreement in principle with the Department of Energy to receive the first draw of $435 million on a previously announced $2.26 billion loan that had been secured during the Biden administration. As part of this deal, the Department of Energy will take a 5% equity stake in the company through warrants to buy common stock at an exercise price of $0.01 per share (not a misprint).
The DOE also will receive a 5% economic stake in the Thacker Pass project through warrants also bearing an exercise price of $0.01. Additionally, the DOE has agreed to defer $182 million worth of debt servicing over the first five years of the loan. The firm describes Thacker Pass in Nevada as the world's largest known measured lithium resource and reserve. The firm broke ground on the mine as recently as 2023.
Wedbush five-star rated analyst Dan Ives has noted that while the U.S. has some of the world's largest lithium deposits, as a nation, the U.S. produces less than 1% of global supply. This mine is, according to Ives, a "massive opportunity" for the U.S. to reduce its reliance on Chinese mines and mines in other countries as well, to provide the U.S. with its supplies of lithium.
The Trump Administration
The Trump administration has shown a desire to support and invest in industries it views as key to national security. This deal with Lithium Americas comes after previous deals with MP Materials (MP) and Intel (INTC) . MP is a Nevada-based firm that mines and processes rare earth minerals, metals and magnets. Lithium, for those that may not know, is a vital component in the manufacture of rechargeable batteries, such as those that power electric vehicles as well as mobile devices and many household products.
Lithium Americas, while operating in the U.S., is headquartered in Vancouver, British Columbia (which is in Canada), giving the U.S. government an equity stake in what is technically a foreign company. Hmm. The Trump administration did not take an equity stake but did secure a "golden share" in the Nippon Steel deal to acquire U.S. Steel giving the federal government the right to block sales to certain foreign entities.
My Thoughts
Is it important that Lithium Americas has yet to generate revenue? Is it important that this firm has generated a net loss of $52.9 million over the trailing twelve months? Apparently not yet. We'll leave this one up to the U.S. investment and technical analysis.
It may be a little bit of a stretch, but I could make the case that LAC has experienced a Double Bottom pattern of bullish reversal while it was mostly moving sideways from summer 2024 into late September 2025. The daily MACD (moving average convergence/divergence) and reading the Relative Strength are both overtly bullish looking after these recent events.
The pivot created by the Double Bottom stands at $5.20. That pivot has already been triggered. The new pivot becomes the Wednesday high of $7.55, which we'll use to create our new price target.
Lithium Americas (LAC)
Price Target: $9.50
Pivot: $7.55
Add: Down to the 200-day simple moving average (SMA) (currently $3.00)
Panic: Loss of 200-day SMA
At the time of publication, Guilfoyle was long LAC and INTC equity.
