Lithium miner Livent is the IBD Stock Of The Day for Monday. LTHM is the latest lithium firm to make the list. Competitor Albemarle was an IBD Stock of The Day two weeks ago. Both lithium stocks are riding on rising prices for the in-demand commodity, up 357% vs. a year ago and nearly 123% so far in 2022.
The increase propelled Livent past expectations for its second-quarter earnings report at the beginning of August. For the period, Livent posted earnings of 37 cents per share on $218.7 million in revenue. Analysts expected EPS to jump to 30 cents from 4 cents a year earlier, and revenue to surge 104% to $208.44 million.
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Livent raised its 2022 outlook during its report. The company expects full-year revenue to range from $800 million to $860 million, above its previous guidance of $755 million to $835 million. The company expects higher realized prices across all lithium products, with no change to its underlying volume assumptions.
Livent is expanding production capacity at its operations in Argentina, North Carolina and China. The moves aim to double the company's output compared with 2021.
Lithium Stocks: LTHM Analysis
Livent is shaping a handle on a deep cup base, which formed following a failed breakout attempt in May. The stock has been consolidating since November.
Lithium stocks Sociedad Quimica y Minera and Albemarle have also completed bases.
Despite its long consolidation, Livent's relative strength has held up fairly well. In addition, the two recent bases undercut prior patterns. That reset the chart's base count after a 17-month run-up in 2020-21. The stock is trading just below its 10-day moving average, following a rebound from support at its 21-day exponential moving average.
LTHM stock currently has a Relative Strength Rating of 85 out of a best-possible 99, indicating strong performance against its peers in the S&P 500 over the last 12 months. Livent recorded positive earnings growth for the past five straight quarters and has an EPS Rating of 77. And the company has averaged 51.2% sales growth over the last seven quarters.
LTHM stock has a muscular 97 Composite Rating. The Composite Rating combines a number of key technical indicators into one easy-to-read score. The stock is ranked third in terms of group leadership for the specialty chemicals group, according to IBD Stock Checkup. Rival Albemarle is ranked first.
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