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Albemarle Corp ALB

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Stock XNYS Rating as of
$128.10 +2.80 (2.23%)
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As of Delayed Price Closed
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Company Report

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Albemarle Earnings: We Expect Improved Results in the Rest of Year Following Cyclically Low Profits

Seth Goldstein

Albemarle's first-quarter results reflected cyclically low lithium prices combined with temporarily high unit production costs. As a result, adjusted EBITDA fell 83% versus the prior-year quarter. Our views for lithium prices to rise in 2024 along with our confidence in Albemarle's ability to reduce its unit production costs throughout the year are unchanged. Having updated our model to incorporate Albemarle's first-quarter results, we maintain our $275 fair value estimate. Our narrow moat rating is also unchanged.

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Price vs Fair Value

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ALB is trading at a 53% discount.
Price
$128.10
Fair Value
$451.00
Uncertainty
High
1-Star Price
$639.87
5-Star Price
$572.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Albemarle has top-tier lithium assets through its brine operations in Chile and spodumene hard-rock operations in Western Australia, which are among the lowest-cost sources of lithium production globally.

Bears

Lithium prices will fall if new supply comes online faster than demand, which will weigh on profitability. Albemarle's plans to increase its lithium production capacity will prove value-destructive in the wake of lower prices.

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Trading Information

Previous Close Price
$125.30
Day Range
$127.38–130.93
52-Week Range
$106.69–247.44
Bid/Ask
$127.81 / $128.30
Market Cap
$15.06 Bil
Volume/Avg
2.6 Mil / 3.5 Mil

Key Statistics

Price/Earnings (Normalized)
10.52
Price/Sales
1.79
Dividend Yield (Trailing)
1.25%
Dividend Yield (Forward)
1.25%
Total Yield
1.25%

Company Profile

Albemarle is one of the world's largest lithium producers. In the lithium industry, the majority of demand comes from batteries, where lithium is used as the energy storage material, particularly in electric vehicles. Albemarle is a fully integrated lithium producer. Its upstream resources include salt brine deposits in Chile and the US and two hard rock mines in Australia, both of which are joint ventures. The company operates lithium refining plants in Chile, the US, Australia, and China. Albemarle is a global leader in the production of bromine, used in flame retardants. It is also a major producer of oil refining catalysts.
Sector
Basic Materials
Industry
Specialty Chemicals
Stock Style Box
Mid Core
Total Number of Employees
9,000
Website
https://www.albemarle.com

Competitors

Valuation

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Metric
ALB
LAAC
SQM
Price/Earnings (Normalized)
 10.52161.166.81
Price/Book Value
 1.620.992.46
Price/Sales
 1.79—1.82
Price/Cash Flow
 10.010.66—
Price/Earnings
ALB
LAAC
SQM

Financial Strength

Metric
ALB
LAAC
SQM
Quick Ratio
 1.648.701.68
Current Ratio
 2.849.162.50
Interest Coverage
 −7.94−0.0622.44
Quick Ratio
ALB
LAAC
SQM

Profitability

Metric
ALB
LAAC
SQM
Return on Assets (Normalized)
 7.72%0.39%18.60%
Return on Equity (Normalized)
 15.06%0.49%39.48%
Return on Invested Capital (Normalized)
 10.72%−1.09%23.58%
Return on Assets
ALB
LAAC
SQM
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