Analyst Michael Sison from Wells Fargo maintained a Buy rating on Albemarle (ALB – Research Report) and keeping the price target at $145.00.
Michael Sison has given his Buy rating due to a combination of factors surrounding Albemarle’s financial health and market position. Despite a backdrop of lower lithium prices, Albemarle is still achieving robust EBITDA margins, which indicates strong operational efficiency and profitability. The company is also experiencing double-digit year-over-year growth in its Energy Storage segment, coupled with a reduction in capital expenditures, which could further enhance profitability should lithium prices stabilize. This balance of growth and cost management supports a positive outlook for the company’s stock performance.
Additionally, Sison’s analysis points to Albemarle’s capacity to maintain or even improve margins within its Energy Storage segment due to reduced costs for spodumene. This operational leverage, alongside expectations for the high end of volume growth projections and a potentially lower capital expenditure trajectory, provides a sound basis for the Buy rating. Moreover, the valuation model employed by Sison suggests there is upside potential for Albemarle’s stock, with a target price that assumes a conservative lithium price scenario, leaving room for upside should market conditions for lithium improve.
In another report released today, KeyBanc also reiterated a Buy rating on the stock with a $159.00 price target.
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Albemarle (ALB) Company Description:
Albemarle Corp. is a specialty company, which engages in developing, manufacturing, and marketing of chemicals for consumer electronics, petroleum refining, utilities, packaging, construction, transportation, pharmaceuticals, crop production, food-safety, and custom chemistry services. It operates through the following segments: Lithium, Bromine Specialties, and Catalysts. The Lithium segment engages in developing and manufacture of basic lithium compounds, including lithium carbonate, lithium hydroxide, lithium chloride, and value-added lithium specialties and reagents. The Bromine Specialties segment consists of bromine and bromine-based business includes products used in fire safety solutions and other specialty chemicals applications. The Catalysts segment contain two product lines: clean fuels technologies, which is primarily composed of hydro processing catalysts, and heavy oil upgrading that comprises of fluidized catalytic cracking catalysts and additives. The company was founded in 1993 and is headquartered in Charlotte, NC.
