Lithium Americas slips from two-year high as Scotiabank cuts to Sell equivalent

[Lithium abstract concept]
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Lithium Americas (NYSE:LAC [https://seekingalpha.com/symbol/LAC]) -3.2% in Monday's trading as Scotiabank downgraded shares to Sector Underperform from Sector Perform with a $5 price target, saying it "can no longer support the valuation" after the stock's remarkable 200% run-up during the past two weeks.

"Simply put, we failed to appreciate how a heated bull market would interpret Trump's magic touch, on a thematic commodity starving for attention... despite the magic touch being dilutive to shareholders," Scotiabank's Ben Isaacson wrote. "Perhaps, investors believe the DoE will backstop delays/cost overruns - i.e., LAC is now too important to fail."

"To compromise with the market (i.e., capitulate), we have introduced a 2x NAV target multiple, largely to reflect fly-up pricing optimism, as a supply deficit will soon return," according to Isaacson, adding that if or when that occurs, the debate will then transition to lithium price sustainability.

"We encourage investors to take profits on a remarkable run, and reload at lower levels," the analyst wrote.

MORE ON LITHIUM AMERICAS

* Lithium Americas: Strategic For The U.S., Risky For Investors [https://seekingalpha.com/article/4827731-lithium-americas-strategic-for-the-us-risky-for-investors]
* Lithium Americas: Fairly Valued As 'Too Big To Fail' Support Grows (Downgrade) [https://seekingalpha.com/article/4827438-lithium-americas-fairly-valued-as-too-big-to-fail-support-grows-downgrade]
* Lithium Americas: Annoying Trump Deal Boosts Stock [https://seekingalpha.com/article/4825605-lithium-americas-annoying-trump-deal-boosts-stock]