With a market cap of $12.2 billion, Albemarle Corporation (ALB) is a leading specialty chemicals company in the materials sector. The Charlotte, North Carolina-based company develops and manufactures engineered chemicals for diverse industries, including energy storage, automotive, and consumer electronics.
Shares of the specialty chemicals company have underperformed the broader market over the past 52 weeks. ALB has declined 18.9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 30.4%. In 2024, shares of ALB are down 28.3%, compared to SPX’s 23.1% gain on a YTD basis.
Focusing more closely, Albemarle has also lagged behind the Materials Select Sector SPDR Fund’s (XLB) 14.3% return over the past 52 weeks and a 6.7% YTD return.
Despite reporting a weaker-than-expected Q3 adjusted loss of $1.55 per share and revenue of $1.4 billion on Nov. 6, shares of ALB rose 3.5% the following day due to its cost-cutting efforts, including $300-$400 million in expected savings from restructuring. The ramp-up of lithium projects and strong volume growth in Energy Storage and Specialties also boosted investor confidence. Additionally, the company’s maintained outlook for the full year helped offset the impact of weaker lithium pricing.
For the current fiscal year, ending in December, ALB is expected to report a loss per share of $1.11, reflecting a nearly 105% year-over-year decline. The company’s earnings surprise history is mixed. It beat the consensus estimates in one of the last four quarters while missing on three other occasions.
Among the 24 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on nine “Strong Buy” ratings, one “Moderate Buy,” 12 “Holds,” and two “Strong Sells.”
This configuration is slightly more bullish than three months ago, with eight “Strong Buy” ratings on the stock.
On Nov. 12, RBC Capital raised its price target on Albemarle to $133 and maintained an “Outperform" rating, citing strong Q3 performance with double-digit growth in Energy Storage, positive year-over-year earnings in Specialties, and improved cost management despite weaker lithium pricing.
The mean price target of $115.83 represents a premium of 11.9% to ALB’s current levels. The Street-high price target of $170, implies a potential upside of 64.2% from the current price.
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