Albemarle Corporation Faces Tough Quarter Ahead: What Investors Need to Know
Albemarle Corporation (ALB), based in Charlotte, North Carolina, is a major player in the specialty chemicals market, focusing on areas such as mobility, energy, connectivity, and health solutions. With a market capitalization of $11.5 billion, the company supplies essential ingredients used in various industries, including grid storage, automotive, aerospace, conventional energy, electronics, construction, agriculture, food, pharmaceuticals, and medical devices. The lithium giant is gearing up to announce its fiscal fourth-quarter earnings for 2024 after the market closes on Wednesday, February 12.
Analysts Predict Significant Earnings Decline
As the announcement approaches, analysts are forecasting a loss of $0.36 per share on a diluted basis for ALB, a drastic decline of 119.5% from the $1.85 per share reported in the same quarter last year. In recent performance, the company has fallen short of consensus estimates in three out of the last four quarters, managing to exceed expectations just once.
Full-Year Losses Forecasted, But Hopes for Recovery
For the full fiscal year, analysts predict that ALB will report a loss of $1.49 per share, down 106.7% from a robust $22.25 in fiscal 2023. Despite this downturn, there is optimism for the future, with expectations for earnings per share (EPS) to rebound by 217.5% year over year, reaching $1.75 in fiscal 2025.
Stock Performance Shows Underwhelming Results
Over the past 52 weeks, ALB stock has underperformed, declining by 18.3%, while the S&P 500 ($SPX) saw an increase of 25%. The company’s performance also lagged behind the Materials Select Sector SPDR Fund’s (XLB) gains of 8.8% during the same period.
Challenges Ahead: Pricing Pressures in Key Markets
The decline in ALB’s stock price can largely be traced back to reduced pricing in the energy storage and lithium markets. On November 6, ALB shares dropped over 3% following the release of its Q3 results, which revealed revenues of $1.35 billion—below Wall Street’s expectations of $1.39 billion. The company is forecasting full-year revenue between $5.5 billion and $6.2 billion.
Analyst Ratings Offer a Mixed Perspective
Despite the challenges, analysts maintain a moderately positive outlook on ALB stock, giving it a “Moderate Buy” rating overall. Among 25 analysts covering the stock, 10 recommend a “Strong Buy,” one recommends a “Moderate Buy,” 12 suggest a “Hold,” and two give a “Strong Sell.” Furthermore, the average analyst price target for ALB stands at $117.56, suggesting a potential upside of 25% from current levels.
On the date of publication, Neha Panjwani did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data herein are for informational purposes only. For more details, please consult the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
