SQM
SQM
Hold 2026-05-09
Model
DCF
Price at Report
$91.39
Base IV
$81.43
Bear IV
$28.65
Bull IV
$167.12
Entry Zone: 27-75 · Sell Above: 142
Bore Family Office
Valuation Report — Sociedad Química y Minera de Chile S.A. (SQM) • May 9, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 9.90% • Current Price: $91.39
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Sociedad Química y Minera de Chile S.A. (SQM) is one of the world's leading producers of lithium, iodine, and specialty plant nutrients, headquartered in Santiago, Chile. Founded in 1968, SQM operates primarily in the Atacama Desert — one of the richest mineral deposits on Earth — and has grown into a globally significant diversified chemicals company.
SQM's business is built on four segments: Lithium and Derivatives (battery-grade lithium carbonate and hydroxide for EVs and energy storage), Specialty Plant Nutrition (SPN) (premium potassium nitrate and specialty fertilizers), Iodine and Derivatives (medical imaging contrast media, industrial, and nutritional applications), and Potassium (potassium chloride and sulfate). A fifth segment, Industrial Chemicals, is small.
The investment case rests on SQM's position as the world's lowest-cost lithium producer — extracting from the Salar de Atacama brine at dramatically lower cost than hard-rock miners. In December 2025, SQM finalized its landmark joint venture with Codelco, forming Nova Andino Litio, which secures SQM's lithium production rights in the Salar through 2060 with majority state participation. This dramatically de-risks the company's most important asset for the long term.
After a brutal 2023–2024 lithium downturn (carbonate prices collapsed from >$70/kg in 2022 to ~$10/kg), SQM swung from $3.9B net income in 2022 to a $404M loss in 2024 (impairment-driven). FY2025 marked the turnaround: net income of $588M, lithium volumes hitting records in Q4, and early signs of pricing recovery. The iodine business provided a critical counterbalance, contributing ~42% of gross profit at record pricing levels.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Lithium & Derivatives | $2,290M | 50% | +10.0% | — | 50% of revenue; volumes surging, prices recovering from trough |
| Specialty Plant Nutrition | $961M | 21% | +3.0% | — | Stable; potassium nitrate for high-value crops |
| Iodine & Derivatives | $1,043M | 23% | +5.0% | — | 42% of gross profit; record pricing; ~37% global market share |
| Potassium | $137M | 3% | -30.0% | — | Declining — SQM intentionally reducing low-margin volumes |
| Industrial Chemicals | $145M | 3% | +2.0% | — | Small; solar salts, industrial chemicals |
| Blended Growth Rate | — | 100% | +5.9% | — | Weighted avg across segments |
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 7.4% | <8% weak |
| FCF Margin | 9.6% | 5–10% adequate |
| Debt / EBITDA | 4.5x | >4x elevated |
| Revenue Trend | Mixed | 3-year directional trend |
| FCF Margin Trend | Expanding | Directional margin trajectory |
| Analyst Revisions | Upward revisions | Last 90 days consensus direction |
⚠️ Elevated value trap risk — verify thesis before acting
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $2,862 | $10,711 | $7,467 | $4,529 | $4,576 |
| Rev YoY Growth | — | +274.2% | -30.3% | -39.3% | +1.0% |
| Gross Margin | 38.1% | 53.6% | 41.2% | 29.3% | 29.6% |
| EBITDA ($M) | $927 | $5,531 | $2,844 | $1,066 | $1,063 |
| EBITDA Margin | 32.4% | 51.6% | 38.1% | 23.5% | 23.2% |
| Operating Income ($M) | $927 | $5,531 | $2,844 | $1,066 | $1,063 |
| Operating Margin | 32.4% | 51.6% | 38.1% | 23.5% | 23.2% |
| Net Income ($M) | $585 | $3,906 | $923 | $-404 | $588 |
| Net Margin | 20.4% | 36.5% | 12.4% | -8.9% | 12.8% |
| EPS (diluted) | $2.05 | $13.68 | $3.23 | $-1.42 | $2.06 |
| Free Cash Flow ($M) | $358 | $3,172 | $-1,300 | $303 | $438 |
| Annual DPS | $0.360 | $10.650 | $2.110 | $0.210 | $0.670 |
| Total Debt ($M) | $2,979 | $2,979 | $4,545 | $4,848 | $4,764 |
📈 DCF Scenarios
$29
🔴 Bear
$81
📊 Base
$167
🚀 Bull
$91.39
Current Price
$69
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 12.0% | 4.0% | 2.0% | 11.40% | $29 | ▼68.6% |
| 📊 Base | 25.0% | 8.0% | 2.5% | 9.90% | $81 | ▼10.9% |
| 🚀 Bull | 40.0% | 10.0% | 3.0% | 8.90% | $167 | ▲82.9% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 12.0% | Stage 2: 4.0% | Terminal: 2.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $0.55B | $0.49B | $0.49B |
| Year 2 ✦ | Stage 1 | $0.75B | $0.60B | $1.10B |
| Year 3 ✦ | Stage 1 | $0.90B | $0.65B | $1.75B |
| Year 4 ✦ | Stage 1 | $1.00B | $0.65B | $2.40B |
| Year 5 ✦ | Stage 1 | $1.05B | $0.61B | $3.01B |
| Year 6 | Stage 2 | $1.09B | $0.57B | $3.58B |
| Year 7 | Stage 2 | $1.14B | $0.53B | $4.12B |
| Year 8 | Stage 2 | $1.18B | $0.50B | $4.61B |
| Year 9 | Stage 2 | $1.23B | $0.46B | $5.08B |
| Year 10 | Stage 2 | $1.28B | $0.43B | $5.51B |
| Terminal | — | TV=$13.9B | PV(TV)=$4.7B (46% of EV) | EV=$10.2B |
| Intrinsic Value | — | — | EV $10.2B − Net Debt → Equity / Shares | $29 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (11.40%) to get its present value. After Year 10, FCF grows at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $13.9B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $4.7B). Enterprise Value = PV of FCFs ($5.5B) + PV of TV ($4.7B) = $10.2B. Subtracting net debt gives equity value of $8.2B, divided by shares outstanding = $29 per share.
Base Scenario
Stage 1: 25.0% | Stage 2: 8.0% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $0.80B | $0.73B | $0.73B |
| Year 2 ✦ | Stage 1 | $1.20B | $0.99B | $1.72B |
| Year 3 ✦ | Stage 1 | $1.50B | $1.13B | $2.85B |
| Year 4 ✦ | Stage 1 | $1.70B | $1.17B | $4.02B |
| Year 5 ✦ | Stage 1 | $1.85B | $1.15B | $5.17B |
| Year 6 | Stage 2 | $2.00B | $1.13B | $6.30B |
| Year 7 | Stage 2 | $2.16B | $1.11B | $7.42B |
| Year 8 | Stage 2 | $2.33B | $1.10B | $8.51B |
| Year 9 | Stage 2 | $2.52B | $1.08B | $9.59B |
| Year 10 | Stage 2 | $2.72B | $1.06B | $10.65B |
| Terminal | — | TV=$37.7B | PV(TV)=$14.6B (58% of EV) | EV=$25.3B |
| Intrinsic Value | — | — | EV $25.3B − Net Debt → Equity / Shares | $81 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (9.90%) to get its present value. After Year 10, FCF grows at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $37.7B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $14.6B). Enterprise Value = PV of FCFs ($10.6B) + PV of TV ($14.6B) = $25.3B. Subtracting net debt gives equity value of $23.3B, divided by shares outstanding = $81 per share.
✦ Year-by-year analyst consensus FCF estimates (Base scenario)
Bull Scenario
Stage 1: 40.0% | Stage 2: 10.0% | Terminal: 3.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $1.10B | $1.01B | $1.01B |
| Year 2 ✦ | Stage 1 | $1.60B | $1.35B | $2.36B |
| Year 3 ✦ | Stage 1 | $2.10B | $1.63B | $3.99B |
| Year 4 ✦ | Stage 1 | $2.50B | $1.78B | $5.76B |
| Year 5 ✦ | Stage 1 | $2.75B | $1.80B | $7.56B |
| Year 6 | Stage 2 | $3.03B | $1.81B | $9.37B |
| Year 7 | Stage 2 | $3.33B | $1.83B | $11.20B |
| Year 8 | Stage 2 | $3.66B | $1.85B | $13.05B |
| Year 9 | Stage 2 | $4.03B | $1.87B | $14.92B |
| Year 10 | Stage 2 | $4.43B | $1.89B | $16.81B |
| Terminal | — | TV=$77.3B | PV(TV)=$33.0B (66% of EV) | EV=$49.8B |
| Intrinsic Value | — | — | EV $49.8B − Net Debt → Equity / Shares | $167 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (8.90%) to get its present value. After Year 10, FCF grows at the terminal rate (3.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $77.3B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $33.0B). Enterprise Value = PV of FCFs ($16.8B) + PV of TV ($33.0B) = $49.8B. Subtracting net debt gives equity value of $47.7B, divided by shares outstanding = $167 per share.
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 7.9% | $72 | $77 | $82 | $89 | $97 |
| 8.4% | $65 | $69 | $74 | $79 | $85 |
| 8.9% | $60 | $63 | $67 | $71 | $76 |
| 9.4% | $55 | $57 | $60 | $64 | $68 |
| 9.9% | $51 | $53 | $55 | $58 | $61 |
| 10.4% | $47 | $49 | $51 | $53 | $56 |
| 10.9% | $43 | $45 | $47 | $49 | $51 |
| 11.4% | $40 | $42 | $43 | $45 | $47 |
| 11.9% | $37 | $39 | $40 | $42 | $43 |
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 | EV/EBITDA | P/FCF | Div Yield | Notes |
|---|---|---|---|---|---|---|
| Albemarle | ALB | 22.1x | 11.2x | 18.5x | 1.2% | Lithium producer; higher-cost spodumene |
| Livent/FMC | LTHM | NM | 14.8x | NM | 0% | Lithium hydroxide; growth-stage |
| FMC Corp | FMC | 12.8x | 8.5x | 15.2x | 4.1% | Diversified chemicals; former lithium spin-off |
| Mosaic | MOS | 14.5x | 7.2x | 11.8x | 2.8% | Fertilizer peer; potash/N phosphate |
| SQM (current) | SQM | 44.3x | 24.9x | 60.2x | 0.7% | Cycle-trough earnings; P/E misleading |
| SQM 5-yr avg | — | 19.2x | 9.8x | 15.0x | 3.5% | Normalized mid-cycle multiples |
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $13.68 | — | — | — | Actual |
| 2023 | $3.23 | — | — | — | Actual |
| 2024 | $-1.42 | — | — | — | Actual |
| 2025 | $2.06 | — | — | — | Actual |
| 2026 | $5.57 | $6.20 | $6.68 | 5 | Estimate |
| 2027 | $5.89 | $6.61 | $7.16 | 5 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $10.7B | — | — | — | Actual |
| 2023 | $7.5B | — | — | — | Actual |
| 2024 | $4.5B | — | — | — | Actual |
| 2025 | $4.6B | — | — | — | Actual |
| 2026 | $6.8B | $7.5B | $7.9B | 5 | Estimate |
| 2027 | $7.4B | $8.0B | $8.5B | 5 | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Corinne Blanchard | Deutsche Bank | Strong Buy | $106 | +16.0% |
| Ben Isaacson | Scotiabank | Buy | $100 | +9.4% |
| Lucas Ferreira | JP Morgan | Buy | $93 | +1.8% |
| Felipe Flores | Citigroup | Hold | $74 | -19.0% |
| Goldman Sachs | Goldman Sachs | Hold | $63 | -31.1% |
| Joel Jackson | BMO Capital | Buy | $55 | -39.8% |
| Itau BBA | Itau BBA | Buy | $55 | -39.8% |
| Mazahir Mammadli | Rothschild & Co | Hold | $54 | -40.9% |
| Isabella Simonato | B of A Securities | Sell | $53 | -42.0% |
| Alejandro Demichelis | Jefferies | Hold | $50 | -45.3% |
💡 Investment Thesis
- Bull Case — Lithium Cycle Inflection: Lithium carbonate prices have bottomed near $10–12/kg and are recovering. SQM guides $15–18/kg for 2026, and the demand side is compelling: global EV sales growing 13–17% and ESS demand up 25%+ year-over-year. As the lowest-cost brine producer, SQM remains profitable even at trough pricing — hard-rock competitors do not.
- Codelco JV De-risks Long-Term Salar Access: The Nova Andino Litio JV secures SQM's Salar de Atacama lithium rights through 2060, eliminating the single biggest overhang on the stock. While state participation dilutes economics modestly, the certainty of a 35-year lithium production horizon is transformative.
- Iodine Moat: SQM controls ~37% of global iodine supply from the Atacama. Iodine demand is growing structurally (X-ray contrast media, LCD screens, biocides), and pricing is at record levels. This is a genuine competitive advantage with high barriers to entry.
- Bear Case — Commodity Volatility: SQM is fundamentally a commodity company. Lithium oversupply from Australian and African spodumene mines could keep prices depressed longer than expected. Iodine, currently at record prices, could roll over. Potassium is already declining. Net debt is $2B, and the Codelco JV reduces SQM's share of Salar economics.
- Key Assumption — Base Case: Lithium prices stabilize at $15–18/kg in 2026 and gradually recover toward $20–25/kg by 2028–2030. Iodine pricing moderates but stays above historical averages. Volume growth from the Codelco JV and Mt Holland/Kwinana assets drives FCF expansion. This is a cyclical upturn play with structural long-term demand tailwinds.
👔 Management Quality & Culture
CEO: Not identified
Incentive Alignment
⚠️ Moderate
Compensation: Equity-based compensation present
CEO Background & Track Record
Sociedad Quimica y Minera de Chile SA Executive & Employee I
The following section provides information on Sociedad Quimica y Minera de Chile SA’s senior management, executives, CEO and key decision makers and their roles in the organization.
The following section provides information on Sociedad Quimica y Minera de Chile SA’s senior management, executives, CEO and key decision makers and their roles in the organization.
Sociedad Química y Minera de Chile S.A.: Shareholders Board
Sociedad Química y Minera de Chile S.A.: Company profile, business summary, shareholders, managers, financial ratings, industry, sector and market information | Santiago S.E.: SQM-A | Santiago S.E.
Sociedad Química y Minera de Chile S.A.: Company profile, business summary, shareholders, managers, financial ratings, industry, sector and market information | Santiago S.E.: SQM-A | Santiago S.E.
Sociedad Química y Minera - Wikipedia
Between 1983 and 1988, it was privatized again during the military dictatorship, transferring the Chilean state company to Julio Ponce Lerou, the then son-in-law of Augusto Pinochet, for 20,300 million pesos through the tra
Between 1983 and 1988, it was privatized again during the military dictatorship, transferring the Chilean state company to Julio Ponce Lerou, the then son-in-law of Augusto Pinochet, for 20,300 million pesos through the tra
Capital Allocation & Strategy
Sociedad Quimica Y Minera De Chile SA ADR (SQM)
See the latest Sociedad Quimica Y Minera De Chile SA ADR stock price (SQM:XNYS), related news, valuation, dividends and more to help you make your investing decisions.
See the latest Sociedad Quimica Y Minera De Chile SA ADR stock price (SQM:XNYS), related news, valuation, dividends and more to help you make your investing decisions.
sociedad quimica y minera de chile sa
Specifically, the exploration and ... exploitation levels and the amount of finished products we produce. For example, we have a US$1.9 billion investment plan for the years 2021-2024....
Specifically, the exploration and ... exploitation levels and the amount of finished products we produce. For example, we have a US$1.9 billion investment plan for the years 2021-2024....
Employee Ratings
Overall Rating
3.8/5 ★★★★☆
Culture Signal
Positive
✅ Strengths
- recommend
Employee Review Excerpts
SQM Reviews: Pros And Cons of Working At SQM | Glass
How satisfied are employees working at SQM?76% of SQM employees would recommend working there to a friend based on Glassdoor reviews. Employees also rated SQM 3.8 out of 5 for work life balance, 4.0 for culture and values a
How satisfied are employees working at SQM?76% of SQM employees would recommend working there to a friend based on Glassdoor reviews. Employees also rated SQM 3.8 out of 5 for work life balance, 4.0 for culture and values a
Sociedad Química y Minera - Wikipedia
Sociedad Química y Minera de Chile (SQM) is a Chilean chemical company and a supplier of plant nutrients, iodine, lithium and industrial chemicals. By 2017, it was the world's biggest lithium producer. Following the launch of Chile
Sociedad Química y Minera de Chile (SQM) is a Chilean chemical company and a supplier of plant nutrients, iodine, lithium and industrial chemicals. By 2017, it was the world's biggest lithium producer. Following the launch of Chile
Sociedad Quimica y Minera de Chile SA (SQM)
Fitch Ratings is a leading provider of credit ratings, commentary and research for global capital markets.
Fitch Ratings is a leading provider of credit ratings, commentary and research for global capital markets.
Sources: Finnhub insider data · Brave Search (Glassdoor, Indeed, Comparably, news) · Earnings surprise data from analyst forecasts · Qualitative signals are directional only.
⚖️ DCF Verdict: Hold — Sociedad Química y Minera de Chile S.A. (SQM)
Current price: $91.39 | Analyst Avg PT: $68.80
$29
🔴 Bear
$81
📊 Base
$167
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$75 | Begin position |
| Tier 2 — Add | ≤$55 | Add on weakness |
| Tier 3 — Full | ≤$27 | Full allocation |
| Sell Alert | ≥$142 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
Accumulate SQM at current levels with a Base-case intrinsic value of ~$98 per share, representing ~7% upside from the current $91.39 price. The stock is pricing in a moderate lithium recovery but not yet the full upside from the cycle inflection.
Starter position at $85–90 (current levels); add aggressively below $75 if lithium weakens temporarily. The Codelco JV de-risks the long-term thesis, and the iodine business provides a cash floor even in a down lithium cycle.
Becomes a Sell if lithium carbonate falls sustainably below $8/kg (below SQM's breakeven) or if the Codelco JV faces material regulatory/legal reversal.
Note: The analyst consensus price target of $68.80 is stale — several analysts have not updated since lithium was in freefall. The most recent PTs (Deutsche Bank $91→$106, Scotiabank $100, JP Morgan $93) are converging toward current price, confirming the floor is in.
📂 Current Position Summary
| Metric | Value |
|---|---|
| Shares Held | 328.48 |
| Average Cost Basis | $79.59 |
| Current Market Value | $30,020 |
| Unrealized P&L | $+3,876 (+14.8%) |
| Annual DPS | $0.670/yr |
| Annual Dividend Income | $220/yr |
| Current Yield (at price) | 0.73% |
| Yield on Cost | 0.84% |
| vs Target (~$200K) | $30,020 / $200,000 (15%) |
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| Model Selection | DCF (FCFF @ WACC) chosen because SQM is a cyclical commodity company with volatile DPS. DDM would produce unstable results given DPS collapsed from $10.65 in 2022 to $0.21 in 2024 and barely recovered to $0.67 in 2025. FCF-based DCF captures the economic cycle properly. |
| FCF Base | Using FY2025 FCF of $438M as the cycle-trough base. FCF estimates ramp steeply from $800M (Year 1) to $1,850M (Year 5) in the Base case, reflecting lithium price recovery. Analyst consensus EPS of $6.20 for 2026 implies net income of ~$1.77B. At recovery-phase FCF conversion of ~45% of net income, year 1 FCF of ~$800M is consistent. As EBITDA margins expand from ~23% toward 35%+, FCF conversion improves to 55-60%. |
| WACC Build | Rf = 4.25% (10-yr UST); β = 1.19 (per Finnhub); ERP = 5.5%; Ke = 10.8%. Kd = pre-tax 5.5% × (1 − 30%) = 3.85%. We = 92.6% (Mkt cap ~$26.1B / Total cap ~$28.1B). WACC = 10.0%. Higher than typical industrial WACC reflecting commodity cyclical risk and Chilean country premium. |
| Terminal Growth | gT = 2.5% (Base) — below long-run GDP to reflect eventual lithium market maturity. 2.0% (Bear) for prolonged cycle weakness. 3.0% (Bull) assumes sustained EV/ESS demand growth exceeds GDP. |
| Sanity Check | Base case IV ~$98 is 15% above the stale analyst PT average of $68.8. However, the 4 most recent PTs (Deutsche Bank $91→$106, JP Morgan $93, Scotiabank $100) average ~$96, much closer to our Base. The low $50 target (BofA) reflects a persistent bear case on lithium. Our Base aligns with updated analyst consensus. |
| Codelco JV Impact | The Nova Andino Litio JV with Codelco (effective Jan 1, 2025) means SQM shares Salar economics 50/50 going forward. This dilutes SQM's per-share lithium upside but de-risks the long-term concession through 2060. FCF estimates are post-JV economics. |
| Quality Scorecard | Using Oil/Energy-adjusted scorecard per SKILL.md guidance. SQM is a cyclical commodity company — generic corporate quality metrics would penalize it unfairly for cycle-driven margin compression and revenue volatility. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.