Albemarle Revises Guidance Due To 40% Dip In Lithium Prices, Analyst Turns Bullish

Shares of Albemarle Corporation ALB spiked in early trading on Monday on prospects of a rebound in lithium demand from China.

There is upside to the current estimates for Albemarle from any increase in lithium demand and prices, and potential tailwinds from the Inflation Reduction Act, according to Baird.

The Analyst: Ben Kallo upgraded the rating for Albemarle from Neutral to Outperform, while raising the price from $222 to $288.

The Thesis: The company revised its guidance due to the over 40% decline in lithium prices year to date, which it maintained for the rest of 2023, Kallo explained.

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The relationship between Albemarle’s contracts and lithium pricing “gives us confidence in ALB's ability to meet or exceed the revised guidance,” Kallo stated.

“ALB is down ~41% from its highs less than a year ago, and we believe that clarity on the impact of pricing, a reset of guidance, and ALB's vertically integrated system position it as a leader for the near and longer term,” he added.

ALB Price Action: Shares of Albemarle had risen by 3.84% to $203.30 at the time of publishing Monday.