Bore Family Office
Valuation Report — Sociedad Química y Minera (SQM) • March 11, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 9.90% • Current Price: $76.56
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Sociedad Química y Minera de Chile (SQM) is the world's largest lithium producer, also producing
specialty plant nutrients (potassium nitrate, sodium nitrate), iodine, and industrial chemicals.
Founded in 1968, SQM operates primarily in Chile's Atacama Desert — home to the world's richest
lithium brine deposits. The company listed on NYSE in 1993 and is majority-owned by Chilean
industrialist Julio Ponce Lerou (controlling ~30%).
Key 2025 Development: SQM signed a landmark JV with
Codelco (Chilean state mining company) in 2023 to extend its Atacama mining rights through 2060
in exchange for Codelco receiving a 50% stake. This JV is transformational — it provides
decades of lithium tenure certainty but dilutes SQM's economics. Operations began transitioning
in 2025.
Revenue collapsed from $10.7B (FY2022) to $4.5B (FY2024–FY2025) as global lithium prices fell
80%+ from 2022 peaks. EPS turned negative in FY2024 (-$1.42) due to inventory write-downs.
Recovery expected in FY2026 as EV adoption accelerates and lithium supply stabilizes.
📊 Financial Snapshot
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|
| Revenue ($M) | $2,862 | $10,711 | $7,467 | $4,529 | $4,576 |
| EBITDA ($M) | $927 | $5,531 | $2,844 | $1,066 | $1,157 |
| Operating Income ($M) | $927 | $5,531 | $2,844 | $1,066 | $1,157 |
| Net Income ($M) | $585 | $3,906 | $2,013 | $-404 | $693 |
| EPS (diluted) | $2.05 | $13.68 | $7.05 | $-1.42 | $2.06 |
| Free Cash Flow ($M) | $358 | $0 | $0 | $0 | $0 |
| Annual DPS | $1.330 | $10.940 | $3.260 | $0.140 | $0.000 |
| Total Debt ($M) | $2,693 | $2,979 | $4,545 | $4,848 | $4,691 |
| Rev YoY Growth | — | +274.2% | -30.3% | -39.3% | +1.0% |
📈 DCF Scenarios
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|
| 🔴 Bear | 8.0% | 5.0% | 2.0% | 9.90% | $34 | ▼55.4% |
| 📊 Base | 18.0% | 10.0% | 2.5% | 9.90% | $68 | ▼11.1% |
| 🚀 Bull | 28.0% | 16.0% | 3.0% | 9.90% | $134 | ▲75.5% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 8.0% | Stage 2: 5.0% | Terminal: 2.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|
| Year 1 | Stage 1 | $0.70B | $0.63B | $0.63B |
| Year 2 | Stage 1 | $0.75B | $0.62B | $1.26B |
| Year 3 | Stage 1 | $0.81B | $0.61B | $1.87B |
| Year 4 | Stage 1 | $0.88B | $0.60B | $2.47B |
| Year 5 | Stage 1 | $0.95B | $0.59B | $3.06B |
| Year 6 | Stage 2 | $1.00B | $0.56B | $3.63B |
| Year 7 | Stage 2 | $1.04B | $0.54B | $4.17B |
| Year 8 | Stage 2 | $1.10B | $0.52B | $4.68B |
| Year 9 | Stage 2 | $1.15B | $0.49B | $5.17B |
| Year 10 | Stage 2 | $1.21B | $0.47B | $5.64B |
| Terminal | — | TV=$15.6B | PV(TV)=$6.1B (52% of EV) | EV=$11.7B |
Base Scenario
Stage 1: 18.0% | Stage 2: 10.0% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|
| Year 1 | Stage 1 | $0.76B | $0.69B | $0.69B |
| Year 2 | Stage 1 | $0.90B | $0.74B | $1.44B |
| Year 3 | Stage 1 | $1.06B | $0.80B | $2.23B |
| Year 4 | Stage 1 | $1.25B | $0.86B | $3.09B |
| Year 5 | Stage 1 | $1.48B | $0.92B | $4.01B |
| Year 6 | Stage 2 | $1.62B | $0.92B | $4.93B |
| Year 7 | Stage 2 | $1.79B | $0.92B | $5.86B |
| Year 8 | Stage 2 | $1.96B | $0.92B | $6.78B |
| Year 9 | Stage 2 | $2.16B | $0.92B | $7.70B |
| Year 10 | Stage 2 | $2.38B | $0.92B | $8.63B |
| Terminal | — | TV=$32.9B | PV(TV)=$12.8B (60% of EV) | EV=$21.4B |
Bull Scenario
Stage 1: 28.0% | Stage 2: 16.0% | Terminal: 3.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|
| Year 1 | Stage 1 | $0.83B | $0.75B | $0.75B |
| Year 2 | Stage 1 | $1.06B | $0.87B | $1.63B |
| Year 3 | Stage 1 | $1.35B | $1.02B | $2.65B |
| Year 4 | Stage 1 | $1.73B | $1.19B | $3.83B |
| Year 5 | Stage 1 | $2.22B | $1.38B | $5.21B |
| Year 6 | Stage 2 | $2.57B | $1.46B | $6.67B |
| Year 7 | Stage 2 | $2.98B | $1.54B | $8.21B |
| Year 8 | Stage 2 | $3.46B | $1.63B | $9.84B |
| Year 9 | Stage 2 | $4.01B | $1.72B | $11.55B |
| Year 10 | Stage 2 | $4.65B | $1.81B | $13.37B |
| Terminal | — | TV=$69.5B | PV(TV)=$27.0B (67% of EV) | EV=$40.4B |
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|
| 7.9% | $88 | $94 | $100 | $108 | $118 |
| 8.4% | $80 | $85 | $90 | $97 | $104 |
| 8.9% | $74 | $77 | $82 | $87 | $93 |
| 9.4% | $68 | $71 | $74 | $79 | $83 |
| 9.9% | $62 | $65 | $68 | $72 | $76 |
| 10.4% | $58 | $60 | $63 | $66 | $69 |
| 10.9% | $54 | $56 | $58 | $60 | $63 |
| 11.4% | $50 | $52 | $54 | $56 | $58 |
| 11.9% | $47 | $48 | $50 | $52 | $54 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | Ticker | P/E (NTM) | EV/EBITDA | Notes |
|---|
| SQM (Chile) | SQM | 13.1x | ~16x | World largest Li producer |
| Albemarle | ALB | N/M | ~10x | US-based Li/specialty chem |
| Livent/Arcadium | ALTM | N/M | ~12x | Merged Li pure-play |
| Pilbara Minerals | PLS.AX | N/M | ~8x | Australian Li hard rock |
| Ganfeng Lithium | 002460.SZ | ~20x | ~12x | Chinese Li giant |
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|
| FY2021 | $2.05 | — | — | — | Actual |
| FY2022 | $13.68 | — | — | — | Actual |
| FY2023 | $7.05 | — | — | — | Actual |
| FY2024 | $-1.42 | — | — | — | Actual |
| FY2025 | $2.06 | — | — | — | Actual |
| FY2026 | $5.57 | $5.85 | $5.96 | 4 | Estimate |
| FY2027 | $5.89 | $6.19 | $6.31 | 4 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|
| FY2021 | $2.9B | — | — | — | Actual |
| FY2022 | $10.7B | — | — | — | Actual |
| FY2023 | $7.5B | — | — | — | Actual |
| FY2024 | $4.5B | — | — | — | Actual |
| FY2025 | $4.6B | — | — | — | Actual |
| FY2026 | $5.5B | $6.5B | $7.3B | 4 | Estimate |
| FY2027 | $7.4B | $7.8B | $7.9B | 4 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $67.85 | Range $44–$100
| Analyst | Firm | Rating | PT | Upside |
|---|
| Ben Isaacson | Scotiabank | Buy | $100 | +30.6% |
| Lucas Ferreira | JP Morgan | Buy | $93 | +21.5% |
| Corinne Blanchard | Deutsche Bank | Strong Buy | $91 | +18.9% |
| Unknown Analyst | Consensus | Hold | $63 | -17.7% |
| Unknown Analyst | Bear | Sell | $43 | -43.8% |
(d) Earnings Surprise History
| Quarter | EPS Act vs Est | EPS Beat/Miss | Rev Act vs Est | Rev Beat/Miss | Guidance |
|---|
| Q4 FY2025 | $0.52 vs $0.48 | +$0.04 ✅ | $1.2B vs $1.1B | +$0.0B ✅ | JV transition on track |
| Q3 FY2025 | $0.41 vs $0.35 | +$0.06 ✅ | $1.1B vs $1.1B | +$0.1B ✅ | Lithium volumes up |
| Q2 FY2025 | $0.62 vs $0.55 | +$0.07 ✅ | $1.1B vs $1.1B | +$0.1B ✅ | Capex guidance maintained |
| Q1 FY2025 | $0.51 vs $0.45 | +$0.06 ✅ | $1.1B vs $1.1B | +$0.1B ✅ | Recovery visible in Q2 |
(e) Confidence Band Commentary
Only 4 analysts cover SQM, reflecting limited sell-side interest during the lithium bear cycle. The tight EPS range ($5.57–$5.96) suggests consensus has converged on a recovery base case. Key uncertainty: timing of lithium price recovery and Codelco JV economics. Stock at $76.56 already trades ABOVE the analyst average PT of $67.85, meaning the market is pricing in a faster/larger recovery than the consensus base case.
💡 Investment Thesis
Bull Case: Lithium prices recover as EV adoption
accelerates globally and Chinese oversupply stabilizes by 2026. SQM's Atacama brine deposits
are the world's lowest-cost lithium source. The Codelco JV (while dilutive) provides 35-year
mining tenure certainty — a strategic asset no competitor can replicate. At $100 bull PT,
SQM trades at 16× normalized earnings in a recovery scenario.
Bear Case: China's BYD and domestic battery manufacturers
continue flooding the market with lithium from Chinese spodumene converters and African brine
projects. SQM's costs remain competitive but margins stay compressed. The Codelco JV mechanics
prove worse than expected. EPS stays in the $2–3 range and the stock retraces to $43–50.
Base Thesis: SQM is a high-quality cyclical — when
lithium is bad, it's very bad; when it's good, the earnings explosion is extraordinary ($13.68
EPS in FY2022). The current $76.56 price already exceeds the analyst consensus PT of $67.85,
meaning the market has priced in recovery ahead of consensus. This is a HOLD at current levels.
Joseph holds 328 shares @ $79.59 — currently underwater by 3.8%. Adding here is not compelling
given the stock already trades above analyst consensus.
⚖️ DCF Verdict: Hold — Sociedad Química y Minera (SQM)
Current price: $76.56 | Analyst Avg PT: $67.85
| Tier | Price | Action |
|---|
| Tier 1 — Starter | ≤$63 | Begin position |
| Tier 2 — Add | ≤$51 | Add on weakness |
| Tier 3 — Full | ≤$36 | Full allocation |
| Sell Alert | ≥$114 | Above fair value — consider trimming |
📂 Current Position Summary
| Metric | Value |
|---|
| Shares Held | 328 |
| Average Cost Basis | $79.59 |
| Current Market Value | $25,112 |
| Unrealized P&L | $-994 (-3.8%) |
| Annual DPS | — (not provided) |
| Annual Dividend Income | — (DPS missing) |
| Current Yield (at price) | — |
| Yield on Cost | — |
| vs Target (~$200K) | $25,112 / $200,000 (13%) |
Bore Family Office • Analysis generated by Lurch • Not investment advice.
