Albemarle's Sale Of Surface Treatment Unit 'Furthers Compelling Lithium Growth Story'

Shares of Albemarle Corporation ALB have traded up nearly 4 percent since the company announced on Friday a deal to sell its Surface Treatment unti to BASF for $3.2 billion.

Deutsche Bank's David Begleiter voiced his praise for the deal and, in a research note Monday, said, the Surface Treatment "sale furthers the (compelling) lithium growth story."

The analyst reiterated a Buy rating and boosted his price target on shares of Albemarle from $84 to $94.

"Albemarle has taken an important step toward its goal of becoming a focused, high growth, high margin lithium and catalyst company," according to Begleiter.

He also noted three other positives to the deal:

• "delevers the balance sheet to its targeted 2.0-2.5x net debt/EBITDA, thus removing a key investor concern,
• provides funding for the company's $600MM lithium capacity expansion and
• enables material ($1B-plus) share buybacks in ’17-’18."