Sigma Lithium (SGML): The brownfield growth play: low capex intensity, high operating leverage. Initiating with OW

We are initiating coverage of Sigma Lithium (SGML) at Overweight with a Dec 2027 price target of $14/share (R$24, C$20). Sigma is a $1bn market cap ($22mn ADTV) low-cost spodumene producer (330ktpy capacity, ~44ktpy LCE) with operations based in Brazil. We see Sigma as an operational de-risking plus brownfield growth story that is being overly discounted on growth and industry risks. J.P. Morgan is also constructive on the lithium market, seeing a persistent industry deficit ahead; we model 2026E / 2027E EBITDA of $136M / $320M, 36% / 35% above consensus, driven by a recovery in mining/plant cadence post the 2025 disruption and a supportive lithium price/tightness backdrop. Sigma trades at a 11% discount to peers on a P/NAV basis. The stock is at ~2.8x 2027E EV/EBITDA versus peers at ~5.6x. Operations are moving past "start-up mode" as mining is internalized and throughput volatility declines. Volumes can more than double on a modular expansion path with most enabling infrastructure al