Sticking With This Lithium Americas Price Target as Stock Tests Breakout
The firm hit investors' radar after an encouraging agreement with the Department of Energy.
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Is Lithium Americas (LAC) seeing a breakout?
Maybe. One of our lesser talked about "Stocks Under $10" names may be on the verge of gaining some recognition. Lithium Americas is less talked about than many of our other names, because quite simply the stock has not done much since I got involved with it. That's not really true. It just feels like that.
LAC is up a rough 50% over 12 months, up 74% over six months, but down 36% over three months. My personal long position is up 13.6%.
The firm will not report until mid-March, so that's not even part of the picture yet. What the firm has is the Department of Energy's 5% stake in the company and the DOE's separate 5% stake in the firm's Thacker Pass joint venture with General Motors (GM) .
GM has a 38% stake in Thacker Pass. That particular site is believed to be home to the largest deposit of lithium anywhere in the western hemisphere. The stakes were to be delivered to the DOE through warrants with an exercise price of $0.01.
The firm also finalized an agreement with the very same energy department to initiate the first $435 million draw from a previously announced $2.26 billion loan in order to support the development of said mine at Thacker Pass. As I have mentioned in the past, that mine is not set to produce until 2028. I have made clear that, for me, this is intended to be a long-term investment.
The Reality Is...
Lithium Americas reported no sales in 2025 and is not expected to report sales unless something changes, in 2026. When the numbers are reported in March, estimates are for a full year EPS of -$0.92. The bright side might be that full year 2026 EPS is projected at -$0.13.
The Chart
Why is LAC showing some life? No, it's not a short squeeze. While it's nothing to sneeze at, just 9.2% of the float is held in short positions. Analyst Ben Isaacson of Scotiabank reiterated his "market perform" (hold-equivalent) rating on LAC on Monday morning, while increasing his target price from $5 to $7. Isaacson is rated at four stars out of five by TipRanks. Isaacson just raised his target from $2.75 to $5 back in October when he had a "sell" rating on the stock.
It may have taken a little while, but LAC appears to be breaking out of the $5.60 pivot created by the double-bottom pattern of bullish reversal that we discussed last month. The stock has now retaken its 50-day SMA and 21-day EMA.
In addition, relative strength is now in a bullish stance and the daily MACD has gone bullish as well after having looked anywhere from semi-bearish to outright bearish for almost three months.
Target Price: $7.75 (reiteration)
Pivot: $5.60
Add: Down to 50-day SMA (currently $5.00)
Panic: Loss of 200-day SMA
At the time of publication, Guilfoyle was long LAC equity.
