KeyBanc has adjusted its price target for Albemarle (ALB, Financial), reducing it from $102 to $95 while maintaining an Overweight rating for the stock. Despite ongoing challenges in the lithium market, Albemarle is starting to show signs of improvement. The firm highlights that stronger earnings results have been fueled by reduced costs and an improved contract mix.
Looking ahead, Albemarle's mining expenses are anticipated to decrease further over the latter half of 2025 and into 2026. This expectation is credited to increased capacity at the Greenbushes and La Negra sites, along with efforts to process higher-cost sections of the Wodgina facility.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 25 analysts, the average target price for Albemarle Corp (ALB, Financial) is $83.46 with a high estimate of $155.00 and a low estimate of $60.00. The average target implies an upside of 40.69% from the current price of $59.32. More detailed estimate data can be found on the Albemarle Corp (ALB) Forecast page.
Based on the consensus recommendation from 29 brokerage firms, Albemarle Corp's (ALB, Financial) average brokerage recommendation is currently 2.6, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Albemarle Corp (ALB, Financial) in one year is $109.47, suggesting a upside of 84.54% from the current price of $59.32. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Albemarle Corp (ALB) Summary page.
ALB Key Business Developments
Release Date: May 01, 2025
- Net Sales: $1.1 billion, including increased specialties volumes and record lithium production.
- Adjusted EBITDA: $267 million, reflecting strong year-over-year improvements in specialties and kitchen.
- Operating Cash Flow: $545 million, with an operating cash conversion rate exceeding 200%.
- Adjusted EBITDA Margin: Improved by approximately 400 basis points year over year.
- Adjusted Diluted EPS: Loss of $0.18 after preferred dividends and excluding discrete tax items.
- SG&A Costs: Down more than 20% year over year due to restructuring and cost savings initiatives.
- Energy Storage EBITDA Margin: 36% in Q1, expected to average in the mid-20% range for the full year 2025.
- Available Liquidity: $3.1 billion, including $1.5 billion in cash and cash equivalents.
- Net Debt to Adjusted EBITDA Ratio: 2.4 times at the end of Q1.
- Free Cash Flow: Slightly positive without the customer pre-payment.
- Capital Expenditures: Expected to reduce by more than 50% year over year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Albemarle Corp (ALB, Financial) reported net sales of $1.1 billion, driven by increased specialties volumes and record lithium production.
- The company achieved an operating cash conversion rate exceeding 200%, generating $545 million in cash from operations.
- Albemarle Corp (ALB) has identified opportunities to reach the high end of their $300 to $400 million cost and productivity improvement target.
- The company expects lithium demand to more than double from 2024 to 2030, driven by the energy transition and global demand for electric vehicles and grid storage.
- Albemarle Corp (ALB) maintains a strong financial position with available liquidity of $3.1 billion, including $1.5 billion in cash and cash equivalents.
Negative Points
- First quarter net sales were lower year over year, mainly due to lower lithium market pricing.
- Adjusted EBITDA was down 8% year over year, impacted by lower lithium pricing and reduced JV pre-tax equity earnings.
- Earnings per share was break-even in the first quarter, with an adjusted diluted loss of $0.18 per share.
- The company anticipates a modest direct impact of tariffs in 2025, estimated at $30 to $40 million on an unmitigated basis.
- Second quarter energy storage margins are expected to be lower due to a lower proportion of lithium salts sold under long-term agreements.
