Albemarle Corporation (ALB), based in North Carolina, is a prominent specialty chemicals company with a market cap of $10.2 billion. It manufactures highly engineered specialty chemicals for various sectors, including petroleum refining, consumer electronics, energy storage, construction, and automotive.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and Albemarle perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the specialty chemical industry.
The company is a global leader in lithium production, critical for electric vehicle batteries. Its fully integrated operations and strategic joint ventures, like Wodgina and Kemerton, boost its production capacity and market competitiveness. Albemarle's innovation focus, backed by a robust intellectual property portfolio of over 1,600 patents, drives growth in sustainable technologies.
Despite the notable feats, ALB shares have slipped 46.4% from their 52-week high of $177.52, achieved on Oct. 12. Over the past three months, ALB stock has fallen 5.1%, underperforming the Dow Jones Industrials Average’s ($DOWI) 7.8% gains during the same time frame.
In the longer term, shares of ALB are down 34.1% on a YTD basis and have plunged 41.9% over the past 52 weeks, trailing DOWI’s YTD gains of 11.9% and 25.5% returns over the last year.
To confirm the bearish trend, ALB has been trading below its 200-day moving average for the past year. However, the stock has been trading over its 50-day moving average recently.
Albemarle’s lackluster price momentum this year can be linked to declining lithium carbonate prices driven by oversupply in the market.
However, ALB rose more than 4% on Sept. 24, benefiting from a more than 2% rise in copper prices, which was a 2-1/4 month high following China's increased stimulus measures.
Moreover, on Jul. 31, ALB stock rose 1.3% after the company released its Q2 earnings report. While the company exceeded its consensus revenue estimate, it fell short of EPS expectations. Additionally, Albemarle lowered its Specialties adjusted EBITDA outlook due to a slower market recovery and rising logistics costs stemming from the ongoing conflict in the Middle East.
In the competitive arena of specialty chemical stocks, Linde plc (LIN) has taken the lead over ALB, returning 17.3% on a YTD basis and 29.8% over the past 52 weeks.
Wall Street analysts are moderately bullish on ALB’s prospects. The stock has a consensus “Moderate Buy” rating from the 23 analysts covering it, and the mean price target of $113.52 suggests a potential upside of 19.3% from current price levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
