What happened

After falling more than 8% in September, shares of Lithium Americas (LAC) seem to be off to a strong start this month. The lithium stock rose 3.1% yesterday, in the first day of trading for October, and continued rising today. With the end of today's trading session, shares of Lithium Americas soared 5.5%, having retreated slightly from their earlier climb of 6.6%.

In addition to the general positive sentiment sweeping through the market today, it appears that the stock is being pushed higher thanks to some positive coverage from Wall Street.

So what

Taking a bullish stance on shares of Lithium Americas, Charles Neivert, an analyst at Piper Sandler, assumed coverage of the stock and assigned an overweight rating. Additionally, Neivert set a $38 price target, which implies upside of more than 40% from the stock's closing price of $27.05 yesterday. According to The Fly, Neivert based the bullish outlook on the belief that the company will succeed in developing its asset, Thacker Pass. 

There has been opposition to the development of Thacker Pass, and the company's success in achieving lithium production at the site is far from a guarantee. Nonetheless, Lithium Americas stated in its second-quarter 2022 earnings report that "Early-works construction is on track to commence in 2022."

Lithium Americas estimates Thacker Pass will have a life of mine over 40 years and achieve average annual earnings before interest, taxes, depreciation, and amortization (EBITDA) of $520 million.

Now what

There are strong tailwinds at the back of the electric vehicle industry, leading growth investors to consider lithium stocks like Lithium Americas. It's important to recognize, though, that successful development of Thacker Pass is far from a guarantee; therefore, potential investors should be comfortable accepting a significant amount of risk before picking up shares.