Albemarle (ALB – Research Report), the Basic Materials sector company, was revisited by a Wall Street analyst yesterday. Analyst Laurence Alexander from Jefferies maintained the rating on the stock to a Buy and gave it a $240.00 price target.
Laurence Alexander’s Buy rating for Albemarle (ALB) was predicated on a variety of factors. Firstly, Albemarle’s decision to withdraw its approximately $4.2 billion bid to acquire Liontown Resources was seen as a positive. This withdrawal underscores the company’s commitment to capital discipline and alleviates investor concerns about the company’s readiness to compromise their return on invested capital (ROIC) for large-scale asset acquisitions, particularly in light of uncertain short-term economic and lithium price forecasts.
The withdrawal should also reduce balance sheet risk, given the lack of clarity on the duration of this cycle and mid-cycle pricing. Moreover, Albemarle’s strategies for near-term capacity expansions to drive volume growth and enhance yields remain on schedule. Despite the recent reduction in earnings projections for 2023, 2024, and 2025 by 3%, 10%, and 9% respectively, due to weaker lithium pricing and anticipated destocking, the positive factors outweigh the negatives, leading to a Buy rating for ALB.
According to TipRanks, Alexander is a 4-star analyst with an average return of 2.4% and a 52.68% success rate. Alexander covers the Basic Materials sector, focusing on stocks such as Albemarle, Eastman Chemical, and Trinseo.
In another report released today, Wells Fargo also maintained a Buy rating on the stock with a $210.00 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.
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