EV/Lithium, page-491

Albemarle stock retains underweight rating


EditorAhmed Abdulazez Abdulkadir
Company News
Published 30/05/2024, 10:46 pm

On Thursday, Piper Sandler maintained its Underweight rating on shares of Albemarle Corporation (NYSE:NYSE:ALB), with a steady price target of $122.00. The firm's stance comes after a thorough review of Albemarle's first-quarter 2024 results, the company's updated guidance, and recent data on lithium pricing and supply/demand forecasts.

The decision to uphold the Underweight rating and price target is driven by the expectation that the market conditions for lithium products will not favor pricing in the next 6 to 12 months. Piper Sandler's valuation is anchored on a 2025 estimated EV/EBITDA multiple of 11.4 times, a slight decrease from the previous 11.8 times. This adjustment reflects a higher earnings estimate, which the firm believes is more indicative of midcycle performance.

Piper Sandler suggests that the EV/EBITDA multiple could trend towards 10 times as earnings continue to rise. Nonetheless, the firm anticipates that due to the current market dynamics and its outlook for the coming 12 to 18 months, a shift in the multiple may not be observed until 2026. The analyst's comments reflect careful consideration of Albemarle's financials and the broader industry context, without implying future market movements.
InvestingPro Insights

As Albemarle Corporation (NYSE:ALB) faces scrutiny from Piper Sandler, the InvestingPro platform offers additional insights that could be of interest to investors. According to real-time data, Albemarle has a market capitalization of $14.51 billion and is trading at a P/E ratio of 44.61, which adjusts to 26.85 when considering the last twelve months as of Q1 2024. This high earnings multiple may suggest that the stock is currently valued at a premium compared to earnings. Furthermore, the company's revenue has seen a decline of 4.27% over the last twelve months, indicative of the challenging market conditions highlighted by Piper Sandler.