BMO Capital downgrades Sigma Lithium stock rating on legal concerns

BMO Capital recently adjusted its rating on Sigma Lithium Corp. (NASDAQ:SGML) from "Outperform" to "Market Perform," lowering its price target to $10.00. The firm's decision to move to the sidelines stems from legal, safety, and environmental issues surrounding the company. The analyst highlighted uncertainty in the timeline for normalized operations, expecting SG&A expenses to rise as Sigma Lithium addresses these challenges.

BMO Capital also pointed to political complexities in Brazil and a more challenging lithium market. A more conservative approach is advised due to the current situation. Meanwhile, Sigma Lithium reported record second-quarter 2026 revenue of $55 million and a 47% EBITDA margin, with production rising by 52% to 35,400 tons of lithium oxide concentrate.

However, a Brazilian judge suspended the company's environmental licenses and mining activities at its Grota do Cirilo mine due to a civil suit over the Bau Quilombola territory. The company has since resumed operations after signing an agreement with the State of Minas Gerais. Sigma Lithium anticipates producing 240,000 tonnes of lithium oxide concentrate within a year and 330,000 tonnes by fiscal year 2027.

JPMorgan recently initiated coverage on the stock with an "overweight" rating, acknowledging the company's shift towards a more stable operating model.