Sociedad Química y Minera de Chile (SQM) has drawn fresh attention after reporting first quarter 2026 sales of US$1,760.11 million and net income of US$364.72 million, both higher than the prior year period.

The stock has been volatile around these results, with the share price slipping around 3% on the day but still up about 16% year to date and backed by a very large 1 year total shareholder return of 164% that signals strong recent momentum.

If strong lithium and specialty materials earnings have your attention, this is a good moment to scan for other potential opportunities across 32 best rare earth metal stocks

With earnings surging and the stock already supported by a very large 1 year return, the key question now is simple: is SQM still trading below what its fundamentals suggest, or has the market already priced in future growth?

Most Popular Narrative: 7% Overvalued

Compared with the latest fair value estimate of about $75.33, SQM's last close at $80.84 sits above what the most followed narrative suggests, using a discount rate of 8.54%.

Recent research on Sociedad Química y Minera de Chile points to a split view, with several bullish analysts lifting ratings and targets on the back of stronger lithium pricing and renewed interest in the sector, while more cautious voices question how current valuations line up with fundamentals.

Bullish analysts have moved from neutral to positive stances and set targets in the high US$80s to around US$90. This reflects increased confidence that current lithium prices can support higher earnings power than previously modeled.

Curious what sits behind that higher earnings power call? The narrative leans on upgraded revenue paths, thicker margins, and a future earnings multiple that might surprise you.

Result: Fair Value of $75.33 (OVERVALUED)

However, lithium price volatility and outcomes from Chilean regulatory agreements still have the potential to challenge earnings expectations and reset how investors view SQM's current valuation.

Another View: What The P/E Ratio Is Saying

The earlier fair value work suggests SQM is about 7% above the SWS estimate, but the P/E tells a slightly different story. At 28.3x earnings, the stock trades above both the US Chemicals industry at 26.4x and its own fair ratio of 27.2x, which hints at limited room for valuation error if sentiment cools.

With the share price already well ahead of the broader market over 1 year and the P/E sitting above both peers and the fair ratio, are you comfortable that current earnings and lithium assumptions fully support this premium?

Next Steps

With sentiment clearly split between risk and reward, this is a good time to move quickly, test the numbers yourself, and weigh the 2 key rewards and 1 important warning sign

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.