Vincent Andrews, an analyst from Morgan Stanley, maintained the Sell rating on Albemarle (ALB – Research Report). The associated price target is $73.00.
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Vincent Andrews has given his Sell rating due to a combination of factors affecting Albemarle Corporation’s performance and outlook. Despite the company’s recent improvements in cost management, which resulted in better-than-expected EBITDA for the fourth quarter of 2024, the broader earnings outlook remains challenging. The lithium market is currently oversupplied, with demand weakening, especially as hybrid vehicles, which require less lithium than fully electric vehicles, gain market share.
Additionally, Albemarle faces significant financial constraints, as evidenced by its high gross leverage and ongoing cash flow challenges. While the company has taken steps to reduce capital expenditures and received a substantial customer pre-payment, these measures may not be sufficient to address the underlying issues. Andrews notes that without substantial deleveraging or growth investments, the stock is likely to remain under pressure, leading to his decision to maintain a Sell rating.
Andrews covers the Basic Materials sector, focusing on stocks such as Eastman Chemical, Dow Inc, and Mosaic Co. According to TipRanks, Andrews has an average return of 5.9% and a 63.79% success rate on recommended stocks.