Morgan Stanley analyst Vincent Andrews upgraded the rating on Albemarle to a Hold yesterday, setting a price target of $147.00.
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Vincent Andrews has given his Hold rating due to a combination of factors that reflect both opportunities and risks for Albemarle. The recent surge in lithium prices, driven by increased ESS shipments, has prompted an upgrade from Underweight to Equal-weight, with a revised price target of $147. This price rally is expected to counterbalance the anticipated decline in EV demand following subsidy reductions in the US and China, as well as the reactivation of previously curtailed capacity and the introduction of new capacity expected in 2026.
However, despite the positive outlook on lithium prices, there are concerns about potential risks such as over-reliance on ESS shipments and the possibility of destocking. Additionally, while earnings estimates have been raised, the company’s cash flow is projected to remain flat due to working capital requirements and non-recurring pre-payments. These mixed factors contribute to the Hold rating, as the potential for a bullish scenario exists, but medium-term risks could lead to a bearish outcome.
In another report released on December 3, Deutsche Bank also maintained a Hold rating on the stock with a $125.00 price target.