Soquimich, as the company is known, advanced 1.6 percent to 28,193 pesos at the close in Santiago, the highest price since May 3.
Bank of America said in a note to clients today that it raised the stock to buy from neutral and set a price target of $68 per American depositary receipt. The company’s ADRs rose 2.4 percent to $57.45 at the close in New York.
“The recent rally in grain prices should support strong potash demand and higher prices,” analysts Fernando Ferreira and Isabella Simonato said in the note. “Strength on both iodine and lithium prices should continue” as supply remains tight, they said.
SQM is trading at 25.7 times its earnings, versus an average 15 times for its peers, according to data compiled by Bloomberg. This premium is “justified” by the company’s earnings growth potential, the Bank of America analysts said.
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