Bloomberg News

Chile’s SQM Reaches 2-Month High as Bank of America Says Buy

July 11, 2012

Soc. Quimica & Minera de Chile SA (SQM:US) rose to a two-month high after Bank of America Corp. (BAC:US) recommended the stock, saying demand for the company’s fertilizers will likely pick up.

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.

To contact the reporter on this story: Eduardo Thomson in Santiago at ethomson1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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Companies Mentioned

  • SQM
    (Sociedad Quimica y Minera de Chile SA)
    • $23.71 USD
    • 0.13
    • 0.55%
  • BAC
    (Bank of America Corp)
    • $17.62 USD
    • 0.09
    • 0.51%
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