Top news and price target raised! Plug Power, Standard Lithium, and BMW partner European Lithium

European Lithium: Stock benefits from top news

European Lithium's stock has been on a significant upward trend since July. This is likely the start of a sustained rally. The raw materials company has two hot irons in the fire: lithium and rare earths. With its lithium deposits in Austria, the Company could help the German automotive industry free itself from its dependence on batteries from China. BMW has already been brought on board through an offtake agreement with European Lithium, with plans to begin supplying lithium for the Neue Klasse batteries starting in 2027.

The trigger for the recent price rally, however, is the US subsidiary Critical Metals. European Lithium holds a majority stake in the Nasdaq-listed company, giving it exposure to one of the hottest topics in the raw materials sector: rare earths.

Critical Metals is currently developing what is likely one of the largest deposits in the world in Greenland. Most recently, results from the ongoing 2024/25 drilling program at the Tanbreez project caused jubilation on the stock market. Consistent grades of 0.40% to 0.42% TREO (total rare earth oxide) were found in all reported drill holes. Particularly noteworthy is the high proportion of heavy rare earth oxides (HREO) of around 26%, which are of great importance for high-tech applications, magnet production, and defense industries. In addition, significant grades of zirconium oxide (1.57% to 1.58%) and gallium oxide (93 to 99 ppm) were identified, indicating additional economic potential. The results not only confirm the continuity of the mineralization. Since it remains open at depth and further assay results are expected by fall, investors appear to be speculating on an increase in the resource estimate.

In addition to exploration, Critical Metals is already working to develop sales markets. Most recently, the Company signed a supply agreement with Ucore Rare Metals. This agreement provides for the delivery of up to 10,000 tons of rare earth concentrate per year from the Tanbreez project – around 10% of the planned total production. In the future, the material will be further refined at Ucore's new processing facilities in Louisiana (USA) and Ontario (Canada). The agreement is particularly significant given the geopolitical situation: The US aims to reduce its dependence on Chinese supply chains in the rare earths sector. The Tanbreez project could thus become a strategic cornerstone of Western raw material security.

In the coming weeks, drilling results could further boost European Lithium's share price. So far, only figures for the 2024 drillings have been published. However, with over 1,900 meters drilled in the current year, more has already been drilled than in 2024. A corresponding number of results should be published soon. And there should also be news from the lithium project soon.

Standard Lithium: Target price rises

Like European Lithium, Standard Lithium is benefiting from the renewed positive sentiment toward explorers outside China. These companies are expected to play a strategically important role in the coming years.

Standard Lithium was recently recommended as a "Buy" by Raymond James. The price target was raised from USD 2.75 to USD 4.00. The share is currently trading at USD 3.07. From the analysts' point of view, the increase is justified by the increased confidence in the Company's technology and project development. Standard Lithium is a leader in the field of direct lithium extraction (DLE). Its US projects, particularly South West Arkansas and East Texas, are likely to gain in importance in the coming decades. The strong balance sheet structure was also viewed positively. The fact that Standard Lithium has more liquid assets than liabilities provides a strong basis for further growth.

There was also positive news about the South West project. Standard has a strong joint venture partner in Equinor and has presented a positive final feasibility study for the project. According to the study, commercial production is scheduled to start in the Smackover Formation in 2028. The planned annual production capacity is 22,500 tons of battery-grade lithium carbonate. The study shows an average lithium concentration of 481 mg/L with a mine life of at least 20 years. There is also potential for expansion. The key figures are also convincing: the net present value (NPV) is USD 1.7 billion, and the internal rate of return is 20.2%. Shareholders are now waiting for the final investment decision from the two partners.

Plug Power: Weak figures, but positive analysts

While European Lithium and Standard Lithium shares have performed well in recent weeks, Plug Power's rally attempt appears to have already come to an end. From May to July, the former hydrogen high-flyer's stock more than doubled. Since then, it has fallen by almost 30%.

And rightly so. There was little good news to be found in the second quarter figures. Revenue rose by 21% to around USD 174 million. The electrolyzer business tripled its revenue to around USD 45 million. However, the business model remains heavily loss-making. The gross margin remained deep in the red at -31%, even though it improved from -92%. Operating and investment net cash consumption was also significantly reduced to over 40%. However, cash burn remains alarmingly high. Operating cash flow was USD -297.4 million, and cash flow for investments was USD -87.3 million.

This makes the liquid assets of USD 140 million and credit lines of USD 300 million appear anything but high. Incidentally, the net loss amounted to USD 227 million (Q2 2024: USD -262 million).

Analysts at Roth/MKM remain bullish, however. They see the fair value of the stock at USD 3.50, more than 100% above the current level. After visiting the production facility in New York State and talking to the CEO and CFO, the experts were confident that Plug Power can turn a profit.

With European Lithium, investors get rare earths and lithium in one stock. Both themes are of strategic importance, and with positive company news, the stock is likely to continue to rise. In contrast, Plug Power is only for speculators. Its cash burn is alarming, and since the founding of the Company, it has never managed to get into the black. In contrast, Standard Lithium, with its strong partner Equinor behind it, currently has a green light on the stock market.