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Albemarle (ALB)
NYSE:ALB
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Albemarle
(NYSE:ALB)42Neutral
Positive Factors
Earnings Growth
The key driver for its earnings growth is expected to be globally accelerated EV adoption, supported by government policies and technological improvement.
Operational Efficiency
Albemarle is enhancing its operational efficiency in FY25 by optimizing capacity, increasing customer prepayments, and improving inventory management.
Negative Factors
Lithium Pricing
Lower lithium prices and potential Chinese production increases have led to a revision of Albemarle's 2025 estimated realized lithium pricing, reflecting low spot prices.
Albemarle (ALB) vs. S&P 500 (SPY)
Market Cap
$8.48B
Dividend Yield2.23%
Average Volume (3M)2.84M
Price to Earnings (P/E)―
Beta (1Y)1.58
Revenue Growth-44.08%
EPS Growth-183.44%
CountryUS
Employees8,300
SectorBasic Materials
Sector Strength56
IndustryChemicals
Share Statistics
EPS (TTM)-11.20
Shares Outstanding117,573,460
10 Day Avg. Volume2,953,904
30 Day Avg. Volume2,842,965
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.58
Price to Cash Flow (P/CF)3146.90
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$99.09Price Target Upside33.53% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering23
Albemarle Business Overview & Revenue Model
Company DescriptionAlbemarle Corp. is a specialty company, which engages in developing, manufacturing, and marketing of chemicals for consumer electronics, petroleum refining, utilities, packaging, construction, transportation, pharmaceuticals, crop production, food-safety, and custom chemistry services. It operates through the following segments: Lithium, Bromine Specialties, and Catalysts. The Lithium segment engages in developing and manufacture of basic lithium compounds, including lithium carbonate, lithium hydroxide, lithium chloride, and value-added lithium specialties and reagents. The Bromine Specialties segment consists of bromine and bromine-based business includes products used in fire safety solutions and other specialty chemicals applications. The Catalysts segment contain two product lines: clean fuels technologies, which is primarily composed of hydro processing catalysts, and heavy oil upgrading that comprises of fluidized catalytic cracking catalysts and additives. The company was founded in 1993 and is headquartered in Charlotte, NC.
How the Company Makes MoneyAlbemarle makes money primarily through the sale of its specialty chemical products across its three main business segments. The Lithium segment is a significant revenue driver, benefiting from the growing demand for electric vehicles and energy storage solutions. This segment produces lithium compounds that are essential for the manufacturing of lithium-ion batteries. The Bromine Specialties segment generates revenue by supplying bromine-based products used in fire safety, water treatment, and various industrial applications. The Catalysts segment contributes to Albemarle's earnings by providing refining catalysts and performance chemicals that aid in the efficient processing of petroleum products. Additionally, Albemarle's strategic partnerships and long-term contracts with major automotive, electronics, and industrial companies help to stabilize and grow its revenue streams.
Albemarle Financial Statement Overview
Summary
Albemarle's financial performance is marked by severe instability, with declining revenue, increasing leverage, and deteriorating cash flows. The financial distress in 2024 is concerning, with critical weaknesses in profitability and liquidity that may pose significant risks to future operations and growth.Income Statement
Albemarle's financials show significant volatility. Gross Profit Margin has fluctuated, with a notable decline in the most recent year. Revenue growth was strong until 2023 but dropped significantly in 2024, indicating challenges in maintaining growth. The negative EBIT and EBITDA margins in 2024 highlight operational inefficiencies and profitability issues, despite previous years showing positive margins.45
Neutral
Balance Sheet
The balance sheet reveals stability concerns with a high Debt-to-Equity ratio, escalating from 2023 to 2024, reflecting increased leverage. The lack of Stockholders' Equity in 2024 is alarming, suggesting potential solvency issues. Previously, the Equity Ratio showed a healthy proportion of equity, but the recent shift indicates financial distress.40
Negative
Cash Flow
Cash flow analysis highlights severe issues with negative Free Cash Flow in 2023 and no available data for 2024, pointing to liquidity problems. The Free Cash Flow to Net Income ratio was weak in prior years, reflecting cash flow inadequacy in covering earnings. These trends suggest potential challenges in sustaining operations without substantial cash reserves or external financing.30
Negative
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 4.33B | 5.38B | 9.62B | 7.32B | 3.33B | 3.13B | Gross Profit |
| 1.52B | 62.54M | 1.19B | 3.07B | 997.97M | 994.85M | EBIT |
| 846.31M | -1.78B | 251.88M | 2.47B | -100.88M | 505.81M | EBITDA |
| 516.40M | -1.01B | 792.75M | 2.87B | 875.13M | 678.62M | Net Income Common Stockholders |
| 263.55M | -1.32B | 1.57B | 2.04B | 123.67M | 375.76M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.19B | 0.00 | 889.90M | 1.50B | 439.27M | 746.72M | Total Assets |
| 16.61B | 16.61B | 18.27B | 15.46B | 10.97B | 10.45B | Total Debt |
| 3.52B | 2.25B | 4.31B | 3.22B | 2.39B | 3.57B | Net Debt |
| 2.32B | 2.25B | 3.42B | 1.72B | 1.95B | 2.83B | Total Liabilities |
| 6.41B | 6.41B | 8.61B | 7.27B | 5.17B | 5.98B | Stockholders Equity |
| 9.96B | 9.96B | 9.41B | 7.98B | 5.63B | 4.27B |
| Cash Flow | Free Cash Flow | ||||
| -1.04B | -983.72M | -823.96M | 646.20M | -609.41M | -51.56M | Operating Cash Flow |
| 18.71M | 702.07M | 1.33B | 1.91B | 344.26M | 798.91M | Investing Cash Flow |
| -1.06B | -1.57B | -2.78B | -1.42B | -666.59M | -863.57M | Financing Cash Flow |
| 1.22B | 1.24B | 623.91M | 611.89M | 50.21M | 177.26M |
Albemarle Technical Analysis
Negative
74.21
Price Trends
84.51
Negative
92.85
Negative
94.39
Negative
Market Momentum
-3.22
Positive
38.43
Neutral
23.54
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALB, the sentiment is Negative. The current price of 74.21 is below the 20-day moving average (MA) of 78.22, below the 50-day MA of 84.51, and below the 200-day MA of 94.39, indicating a bearish trend. The MACD of -3.22 indicates Positive momentum. The RSI at 38.43 is Neutral, neither overbought nor oversold. The STOCH value of 23.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ALB.
Albemarle Risk Analysis
Albemarle disclosed 48 risk factors in its most recent earnings report. Albemarle reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Albemarle Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $10.72B | 12.13 | 16.11% | 3.50% | 1.91% | 2.94% | |
57 Neutral | $2.67B | 21.03 | 0.18% | 2.86% | -4.35% | -115.63% | |
55 Neutral | $2.72B | 25.94 | 5.10% | 3.39% | -4.29% | -74.85% | |
55 Neutral | $10.60B | ― | -6.32% | 3.56% | -48.69% | -110.85% | |
53 Neutral | $2.00B | 23.42 | 12.98% | 7.46% | -4.05% | ― | |
47 Neutral | $2.64B | -4.00 | -31.55% | 3.33% | 2.93% | -29.90% | |
42 Neutral | $8.48B | ― | -12.18% | 2.23% | -44.08% | -183.44% |
* Basic Materials Sector Average
Performance Comparison
ALB
Albemarle
74.21
-43.55
-36.98%
ASH
Ashland
59.42
-34.02
-36.41%
EMN
Eastman Chemical
97.73
13.49
16.01%
OLN
Olin
25.19
-29.57
-54.00%
SQM
Sociedad Quimica Y Minera SA
39.93
-6.36
-13.74%
CC
Chemours Company
14.10
-6.81
-32.57%
Albemarle Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -3.12% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with strong operational improvements and strategic initiatives being counterbalanced by lower sales due to lithium market challenges. While the company has made significant strides in cash flow and cost management, market dynamics continue to pose challenges.Highlights
Energy Storage Segment Growth
The Energy Storage segment delivered a 26% year-over-year increase in sales volumes, surpassing initial guidance of 10% to 20% growth, driven by successful project ramps and increased spodumene sales.
Cash Flow Performance
Generated $702 million in cash from operations with an operating cash conversion rate exceeding 60%, above the target of 50% and in line with the long-term objective. Expected to achieve breakeven free cash flow in 2025.
Cost and Capital Improvements
Over 50% of the $300 million to $400 million cost improvement target achieved, and 2025 capital expenditures reduced by $100 million to $700 million to $800 million, down more than 50% from 2024.
Strategic Framework and Initiatives
Announced new measures to optimize global conversion network, improve cost and efficiency, reduce capital expenditure, and enhance financial flexibility.
Lowlights
Net Sales Decline
Fourth quarter net sales of $1.2 billion represented a year-over-year decline primarily due to lower lithium market pricing.
Adjusted Earnings Per Share Loss
Fourth quarter adjusted earnings per share reflected a loss of $1.09, excluding gains on asset sales, reduced restructuring charges, and discrete tax items.
Lithium Market Challenges
Continued pressure on lithium pricing with current market dynamics leading to certain capacity being underwater and potential curtailments.
China Market Dynamics
Chengdu lithium conversion facility to be placed into care and maintenance by mid-2025 due to market conditions and shifting product mix.
Company Guidance
During Albemarle Corporation's Q4 2024 earnings call, the company provided comprehensive guidance for the upcoming year, highlighting several key financial metrics and strategic initiatives. The company reported a net sales figure of $1.2 billion for Q4 2024, with an adjusted EBITDA of $251 million, contributing to a full-year adjusted EBITDA of $1.1 billion. Albemarle's Energy Storage segment experienced a remarkable 26% year-over-year increase in sales volumes, exceeding its initial guidance. The company emphasized its strong cash generation, with $702 million in operating cash and an operating cash conversion rate exceeding 60%. For 2025, Albemarle announced a reduction in its capital expenditure outlook by $100 million, now expecting to spend between $700 million and $800 million. This strategic move is part of Albemarle's broader initiatives to optimize its conversion network, improve cost efficiencies, reduce capital expenditure, and enhance financial flexibility. Additionally, the company explored various lithium market pricing scenarios, with assumptions ranging from $9 to $20 per kilogram, and projected improvements in cost and productivity to sustain margins despite lower lithium prices. The company signaled a path to breakeven free cash flow in 2025, driven by new capacity ramp-ups and significant cost-saving measures.Albemarle Corporate Events
Executive/Board Changes
Albemarle Appoints Donald LaBauve as Chief Accounting Officer
Positive
Oct 31, 2024
Albemarle Corporation has appointed Donald J. LaBauve, Jr. as its new Chief Accounting Officer, effective November 11, 2024. With a solid background in finance and leadership roles within the company since 1990, LaBauve brings vast experience from his previous positions, including Chief Financial Officer of the Energy Storage business unit. His appointment marks a strategic move for Albemarle, ensuring continuity and expertise in their financial operations.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.