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Albemarle Corp ALB

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Morningstar’s Analysis

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Raising Albemarle FVE to $140 on Higher Long-Term Lithium Volumes; Shares Fairly Valued

Seth Goldstein, CFA Senior Equity Analyst

Analyst Note

| Seth Goldstein, CFA |

Our key takeaway from Albemarle's fourth-quarter earnings was management's plan to further expand its lithium capacity by around 50,000 metric tons over what we had already forecast. We have also made minor adjustments to our near-term bromine outlook for Albemarle as the company guided to higher growth than we previously forecast. Additionally, we have reduced our 2021 outlook for the catalyst business as we expect a slower recovery from the COVID-19-related slowdown than we had previously forecast. Having updated our model to reflect these changes, we raise our Albemarle fair value estimate to $140 per share from $135. Our narrow-moat rating is unchanged.

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Company Profile

Business Description

Albemarle is the world's largest lithium producer. Our outlook for robust lithium demand is predicated upon increased demand for electric vehicle batteries. Albemarle produces lithium from its salt brine deposits in Chile and the U.S. and its hard rock joint venture mines in Australia. Albemarle is also a global leader in the production of bromine, used in flame retardants, and oil refining catalysts.

4250 Congress Street, Suite 900
Charlotte, NC, 28209
T +1 980 299-5700
Sector Basic Materials
Industry Specialty Chemicals
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 5,900