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Albemarle Corp ALB

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Morningstar’s Analysis

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Raising FVE to $145 as Albemarle Reports Solid First-Quarter Results; Shares Fairly Valued

Seth Goldstein, CFA Senior Equity Analyst

Analyst Note

| Seth Goldstein, CFA |

Albemarle reported solid first-quarter results, as adjusted EBITDA was up 17% year on year as higher lithium and bromine profits were partially offset by lower catalyst profits. We have updated our outlook to account for slightly higher near-term lithium results, as we expect the company will take advantage of strong demand and sell more volumes. Separately, we have increased our outlook for the bromine business to account for a capacity expansion amid strong demand for brominated flame retardants used in servers and electronics. After updating our model to reflect these changes, we increase narrow-moat Albemarle's fair value estimate to $145 per share from $140.

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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. The company is also a major producer of 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 Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 5,900