Albemarle Corporation’s Performance and Outlook: A Mixed Bag for Investors
With a market cap of $12.2 billion, Albemarle Corporation (ALB) stands out as a significant player in the specialty chemicals sector. Based in Charlotte, North Carolina, the company specializes in creating engineered chemicals for a variety of industries, such as energy storage, automotive, and consumer electronics.
Over the past year, Albemarle’s shares have struggled compared to the overall market. ALB has decreased by 18.9%, while the broader S&P 500 Index ($SPX) has seen a robust increase of 30.4%. In 2024, the company’s shares are down 28.3%, while SPX has gained 23.1% year-to-date.
Compared to Sector Peers
In relation to the Materials Select Sector SPDR Fund (XLB), which returned 14.3% over the same period and 6.7% year-to-date, Albemarle’s performance looks dismal.
Market Reaction to Q3 Results
Despite posting a weaker-than-expected Q3 with an adjusted loss of $1.55 per share and revenue of $1.4 billion on November 6, shares of ALB rose 3.5% the next day. This rise was largely attributed to cost-cutting measures targeting $300-$400 million in savings from restructuring. Additionally, the company benefitted from a boost in lithium projects and growth in Energy Storage and Specialties. Maintaining its full-year outlook also helped assuage concerns regarding declining lithium prices.
Looking Ahead: Financial Expectations
For the fiscal year ending in December, ALB is projected to report a loss per share of $1.11, indicating a nearly 105% decline from the previous year. Its recent earnings history indicates uncertainty, having beaten estimates once while missing three times in the past four quarters.
Analyst Ratings: A Cautiously Optimistic View
Among the 24 analysts monitoring the stock, the consensus rating is a “Moderate Buy,” made up of nine “Strong Buy” ratings, one “Moderate Buy,” 12 “Holds,” and two “Strong Sells.” This indicates a slight increase in optimism compared to three months ago, when there were eight “Strong Buy” ratings.
Price Targets Show Potential Upside
On November 12, RBC Capital raised its price target on Albemarle to $133 and reiterated an “Outperform” rating, citing the strong Q3 results driven by double-digit growth in Energy Storage and effective cost management despite challenges in lithium pricing. Currently, the average price target of $115.83 suggests an 11.9% premium over ALB’s current trading levels. Notably, the highest forecast of $170 implies an upside potential of 64.2% from the current price.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
