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Albemarle (ALB)
NYSE:ALB
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Albemarle
(NYSE:ALB)
Rating:51Neutral
Price Target:―
Positive Factors
Cost Efficiency
ALB has made strong progress on its cost-saving initiatives, reaching 90% of its $300-400mn run rate target as of April.
Earnings
ALB posted 1Q EBITDA of $267mn, above consensus despite a sales miss, as cost savings expanded margins.
Market Demand
ALB's lithium demand model suggests a sooner inflection to undersupply, with a bullish demand outlook potentially supporting a lithium price recovery.
Negative Factors
Commodity Prices
External factors such as commodity price volatility, unforeseen market supply expansions, and stringent environmental regulations could potentially disrupt assumptions.
Financial Performance
Free Cash Flow remains negative excluding the $350 million customer advance, which is both cash and a deferred liability.
Valuation
There is a significant risk of multiple contraction as a 10x EBITDA multiple is used for lithium despite other mined commodities being at 5-8x.
Albemarle (ALB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.71B
Dividend Yield2.83%
Average Volume (3M)3.38M
Price to Earnings (P/E)―
Beta (1Y)1.42
Revenue Growth-39.34%
EPS Growth-500.52%
CountryUS
Employees8,300
SectorBasic Materials
Sector Strength69
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)-0.18
Shares Outstanding117,660,910
10 Day Avg. Volume3,437,694
30 Day Avg. Volume3,380,403
Financial Highlights & Ratios
PEG Ratio32.08
Price to Book (P/B)0.68
Price to Sales (P/S)0.00
P/FCF Ratio-48.83
Enterprise Value/Market Cap1.33
Enterprise Value/Revenue0.37
Enterprise Value/Gross Profit49.68
Enterprise Value/Ebitda-1.81
Forecast
1Y Price Target
$73.65Price Target Upside23.37% Upside
Rating ConsensusHold
Number of Analyst Covering21
Albemarle Business Overview & Revenue Model
Company DescriptionAlbemarle Corporation is a global specialty chemicals company and a leading producer of lithium, bromine, and catalysts. The company operates in three primary segments: Lithium, Bromine Specialties, and Catalysts. Albemarle's lithium operations focus on producing high-quality lithium compounds used in batteries, especially for electric vehicles, as well as other industrial applications. The Bromine Specialties segment provides products used in fire safety, oilfield drilling, and other industrial uses. The Catalysts segment supplies refining solutions to the oil and gas industry, enhancing the production of high-value end products.
How the Company Makes MoneyAlbemarle makes money through the production and sale of specialty chemicals, with a significant portion of its revenue derived from its Lithium segment. The demand for lithium is driven by the growing electric vehicle market, which has been a primary growth driver for the company. Albemarle extracts lithium from its mines and converts it into compounds required for battery production. The Bromine Specialties segment generates revenue by supplying bromine-based products, which are crucial in various industrial applications, including flame retardants and oilfield solutions. The Catalysts segment contributes to earnings by providing refining solutions that improve the efficiency and output of petroleum refineries. Additionally, Albemarle engages in strategic partnerships and long-term supply agreements, particularly in the lithium sector, which enhance its revenue stability and growth potential.
Albemarle Key Performance Indicators (KPIs)
Any
Revenue by Segment
Analyzes revenue from different business segments, highlighting which areas drive growth and profitability, and indicating potential shifts in strategic focus or market demand.
Analyzes revenue from different business segments, highlighting which areas drive growth and profitability, and indicating potential shifts in strategic focus or market demand.
Data provided by:
Main Street Data
Main Street DataAlbemarle Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: 1.96%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
Albemarle's earnings call reflected a mixed outlook. The company achieved strong operational milestones, including record lithium production and significant cost savings. However, these positive developments were offset by challenges such as declining net sales, impacts from tariffs, and lower expected margins in energy storage. Despite the difficulties, Albemarle maintains a positive long-term outlook for lithium demand.Q1-2025 Updates
Positive Updates
Record Lithium Production
Albemarle reported record lithium production from its integrated lithium conversion network in Q1 2025.
Strong Cash Flow Generation
The company generated $545 million in cash from operations, achieving an operating cash conversion rate exceeding 200%.
Cost and Productivity Improvements
Albemarle achieved approximately 90% run rate to the midpoint of their $350 million cost and productivity improvement target.
Positive Long-Term Lithium Demand Outlook
Global lithium demand is expected to more than double from 2024 to 2030, driven by the energy transition and demand for electric vehicles and grid storage.
Improved EBITDA Margins in Specialties and Ketjen
Adjusted EBITDA increased by 30% in Specialties and 76% in Ketjen year-over-year.
Negative Updates
Decline in Net Sales
First quarter net sales of $1.1 billion were lower year-over-year, mainly due to lower lithium market pricing.
Adjusted EBITDA and EPS Loss
Adjusted EBITDA was down 8% year-over-year, and adjusted diluted earnings per share was a loss of $0.18.
Impact of Tariffs
The estimated direct impact of tariffs in 2025 is approximately $30 million to $40 million, affecting Specialties and Ketjen.
Challenges in Energy Storage Margins
Second quarter margin is expected to be lower due to a lower proportion of lithium salts sold under long-term agreements.
High Net Debt to Adjusted EBITDA Ratio
The company ended Q1 with a net debt to adjusted EBITDA ratio of 2.4 times.
Company Guidance
During Albemarle Corporation's Q1 2025 earnings call, the company provided guidance emphasizing several key metrics. They reported net sales of $1.1 billion and an adjusted EBITDA of $267 million, reflecting strong year-over-year improvements in specialties and kitchen. The company achieved an operating cash conversion rate exceeding 200%, generating $545 million in cash from operations. They are maintaining their 2025 outlook considerations, highlighting a 90% run rate towards the midpoint of a $350 million cost and productivity improvement target and projecting global lithium demand growth in the 15% to 40% range in 2025. Albemarle's strategy continues to focus on optimizing their conversion network, improving cost and productivity, reducing capital expenditure, and enhancing financial flexibility, despite an uncertain external market environment.Albemarle Financial Statement Overview
Summary
Albemarle's financial performance is under pressure with challenges in profitability as seen in negative EBIT and net income. The balance sheet shows moderate stability, but cash flow is strained by negative free cash flow and high capital expenditures. Overall, financial metrics suggest caution due to weak income and cash flow results.Income Statement
Albemarle's income statement reveals significant challenges in the TTM period with negative EBIT and net income, causing a downturn in profitability. The company's gross profit margin has declined dramatically, reflecting pressure on cost management. Additionally, revenue has decreased on a year-over-year basis, indicating a contraction in sales. These factors contribute to a low score due to weak performance metrics, despite historical periods of profitability.35
Negative
Balance Sheet
Albemarle maintains a moderate balance sheet with a debt-to-equity ratio around the industry norm, indicating a balanced leverage position. The company's equity ratio remains strong, showcasing a stable asset base backed by shareholder equity. However, the recent decline in equity and assets could signal potential risks if the trend continues.60
Neutral
Cash Flow
Cash flow analysis shows Albemarle experiencing negative free cash flow in recent periods, impacted by substantial capital expenditures. The operating cash flow to net income ratio is positive, suggesting that core operations are generating cash despite net losses. However, the lack of free cash flow growth and persistent negative free cash flow highlight liquidity concerns, warranting a cautious outlook.50
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 5.09B | 5.38B | 9.62B | 7.32B | 3.33B | 3.13B | Gross Profit |
| 179.90M | 62.54M | 1.19B | 3.07B | 997.97M | 994.85M | EBIT |
| -1.28B | -1.78B | 251.88M | 2.47B | -100.88M | 505.81M | EBITDA |
| -811.95M | -1.01B | 792.75M | 2.87B | 875.13M | 678.62M | Net Income Common Stockholders |
| -1.14B | -1.18B | 1.57B | 2.04B | 123.67M | 375.76M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 2.06B | 0.00 | 889.90M | 1.50B | 439.27M | 746.72M | Total Assets |
| 19.03B | 16.61B | 18.27B | 15.46B | 10.97B | 10.45B | Total Debt |
| 3.67B | 3.62B | 4.31B | 3.22B | 2.39B | 3.57B | Net Debt |
| 1.61B | 2.42B | 3.42B | 1.72B | 1.95B | 2.83B | Total Liabilities |
| 7.23B | 6.41B | 8.61B | 7.27B | 5.17B | 5.98B | Stockholders Equity |
| 11.53B | 9.96B | 9.41B | 7.98B | 5.63B | 4.27B |
| Cash Flow | Free Cash Flow | ||||
| -139.59M | -983.72M | -823.96M | 646.20M | -609.41M | -51.56M | Operating Cash Flow |
| 1.15B | 702.07M | 1.33B | 1.91B | 344.26M | 798.91M | Investing Cash Flow |
| -1.26B | -1.57B | -2.78B | -1.42B | -666.59M | -863.57M | Financing Cash Flow |
| -435.57M | 1.24B | 623.91M | 611.89M | 50.21M | 177.26M |
Albemarle Technical Analysis
Neutral
59.70
Price Trends
59.98
Negative
70.49
Negative
82.38
Negative
Market Momentum
-0.82
Negative
52.74
Neutral
55.50
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALB, the sentiment is Neutral. The current price of 59.7 is above the 20-day moving average (MA) of 58.45, below the 50-day MA of 59.98, and below the 200-day MA of 82.38, indicating a neutral trend. The MACD of -0.82 indicates Negative momentum. The RSI at 52.74 is Neutral, neither overbought nor oversold. The STOCH value of 55.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 3 New Risks
1.
Write-offs or impairment of our goodwill, intangible assets or long-lived assets can result in significant charges to earnings. Q4, 2024
2.
Our business could suffer if we are not successful in executing our strategy and initiatives in connection with our comprehensive review of our cost and operating structure. Q4, 2024
3.
Development projects are inherently risky and may require more capital than anticipated, which could adversely affect our business. The development of our mines and operations are also subject to other unique risks. Q4, 2024
Albemarle Peers Comparison
Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $3.28B | 33.15 | 4.32% | 2.88% | 3.58% | -5.17% | |
68 Neutral | $9.29B | 10.25 | 16.16% | 4.08% | 2.78% | 1.50% | |
68 Neutral | $3.00B | 27.91 | 6.35% | 1.63% | 0.99% | -27.62% | |
56 Neutral | $8.95B | 23.48 | 3.71% | 3.01% | -1.27% | 48.34% | |
51 Neutral | $6.71B | ― | -10.58% | 2.83% | -39.34% | -500.52% | |
51 Neutral | $2.01B | -1.11 | -21.16% | 3.67% | 2.69% | -30.65% | |
48 Neutral | $8.67B | 15.18 | 12.17% | 0.47% | -28.74% | 53.25% |
* Basic Materials Sector Average
Performance Comparison
ALB
Albemarle
59.70
-56.39
-48.57%
EMN
Eastman Chemical
80.83
-16.83
-17.23%
FUL
H.B. Fuller Company
56.05
-20.75
-27.02%
AVNT
Avient
36.47
-7.54
-17.13%
SQM
Sociedad Quimica Y Minera SA
32.02
-15.05
-31.97%
WLK
Westlake Corporation
72.11
-79.27
-52.36%
Albemarle Corporate Events
Executive/Board ChangesShareholder Meetings
Albemarle Shareholders Approve Key Proposals at Annual Meeting
Neutral
May 9, 2025
On May 6, 2025, Albemarle held its Annual Meeting of Shareholders where several proposals were voted on. Shareholders elected directors for a term expiring in 2026, approved executive compensation on a non-binding basis, ratified the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for 2025, and approved a shareholder proposal regarding a simple majority vote.
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.