Lithium Americas (LAC) is rising today after General Motors (GM) announced that it will be backing the Thacker Pass mining project. The legacy automaker plans to invest $625 million in Lithium’s mining venture and receive a 38% ownership stake. This decision marks the biggest publicly announced investment made by an original equipment manufacturer (OEM) in a lithium carbonate project.
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Thacker Pass will be a lithium carbonate mining operation in Humboldt County, Nevada. So far, the market is reacting well to General Motors’ decision.
What’s Going On with Lithium Americas Stock?
News of this partnership sent shares of both Lithium Americas and General Motors up in premarket trading today. Since then, the momentum hasn’t slowed down. As of this writing, LAC stock is up 21% and GM is up 2%. Despite constant volatility, Lithium Americas has spent the past month trending upward and looks primed to rise above $3 per share.
If Thacker Pass is successful, it could become the key catalyst that pushes LAC out of penny stock territory. Lithium is a critical component of EV battery production, and demand is likely to continue increasing as the EV market booms. General Motors’ decision indicates that it sees growth ahead for the Lithium market.
In a statement released by GM, Jeff Morrison, SVP of Global Purchasing and Supply Chain discussed the company’s goal of developing a “resilient EV material supply chain” in the near future. He added, “Sourcing critical EV raw materials, like lithium, from suppliers in the U.S., is expected to help us manage battery cell costs, deliver value to our customers and investors.”
Is LAC Stock a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on LAC stock based on four Buys, three Holds, and no Sells assigned in the past three months, as indicated by the graphic below. Despite a 68% decline in its share price over the past year, the average LAC price target of $5.09 per share implies 65.3% upside potential.
This fairly positive sentiment toward Lithium Americas’ is noteworthy, as LAC is a penny stock that has struggled significantly throughout the year. Robust demand for lithium, driven by the fast-growing EV battery market, is a likely contributor to this bullish trend.
