Albemarle (ALB) AI Stock Analysis

• Market Cap: $6.88B
• Dividend Yield: 2.78%
• Average Volume (3M): 2.76M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.57
• Revenue Growth: -44.08%
• EPS Growth: -183.44%
• Country: US
• Employees: 8,300
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): -11.20
• Shares Outstanding: 117,650,566
• 10 Day Avg. Volume: 2,402,729
• 30 Day Avg. Volume: 2,761,373
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.70
• Price to Cash Flow (P/CF): 3382.40
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $93.38
• Price Target Upside: 83.96% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 22

Albemarle's overall stock score reflects significant financial weaknesses with declining revenue and profitability issues. Technical indicators signal bearish momentum, and valuation metrics raise concerns with a negative P/E ratio. Although strategic initiatives from the earnings call indicate some potential for recovery, they are overshadowed by ongoing market challenges.

Positive Factors

Cost Management

ALB is making significant cost and productivity improvements, targeting $300-400 million in savings by the end of 2025, which could benefit the company when market conditions improve.

Market Position

ALB is focused on managing cash flows effectively and is well positioned for potential upside when market conditions improve.

Operational Efficiency

Albemarle is enhancing its operational efficiency in FY25 by optimizing capacity, increasing customer prepayments, and improving inventory management.

Negative Factors

Lithium Demand

The ongoing weak demand and pricing environment for lithium is expected to continue impacting lithium demand and limiting potential price increases.

Pricing Environment

The forecast reflects a headwind to cash flow from operations due to the $350M customer prepayment being spread over a 5 year period.

Revenue and Earnings

Revenue decreased by 48% y/y and 9% q/q to USD1.2bn, while FY24 revenue fell 44% y/y to USD5.4bn, primarily due to depressed lithium prices.

Albemarle Business Overview & Revenue Model

Company Description

Albemarle Corporation develops, manufactures, and markets engineered specialty chemicals worldwide. It operates through three segments: Lithium, Bromine, and Catalysts. The Lithium segment offers lithium compounds, including lithium carbonate, lithium hydroxide, lithium chloride, and lithium specialties; and reagents, such as butyllithium and lithium aluminum hydride for use in lithium batteries for consumer electronics and electric vehicles, high performance greases, thermoplastic elastomers for car tires, rubber soles, plastic bottles, catalysts for chemical reactions, organic synthesis processes in the areas of steroid chemistry and vitamins, life sciences, pharmaceutical industry, and other markets. It also provides cesium products for the chemical and pharmaceutical industries; zirconium, barium, and titanium products for pyrotechnical applications that include airbag initiators; technical services for the handling and use of reactive lithium products; and lithium-containing by-products recycling services. The Bromine segment offers bromine and bromine-based fire safety solutions; specialty chemicals, including elemental bromine, alkyl and inorganic bromides, brominated powdered activated carbon, and other bromine fine chemicals for use in chemical synthesis, oil and gas well drilling and completion fluids, mercury control, water purification, beef and poultry processing, and other industrial applications; and other specialty chemicals, such as tertiary amines for surfactants, biocides, and disinfectants and sanitizers. The Catalysts segment provides hydroprocessing, isomerization, and akylation catalysts; fluidized catalytic cracking catalysts and additives; and organometallics and curatives. The company serves the energy storage, petroleum refining, consumer electronics, construction, automotive, lubricants, pharmaceuticals, and crop protection markets. Albemarle Corporation was founded in 1887 and is headquartered in Charlotte, North Carolina.

How the Company Makes Money

Albemarle 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.

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.

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.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
5.38B	9.62B	7.32B	3.33B	3.13B
	Gross Profit
62.54M	1.19B	3.07B	997.97M	994.85M
	EBIT
-1.78B	251.88M	2.47B	-100.88M	505.81M
	EBITDA
-1.01B	792.75M	2.87B	875.13M	678.62M
	Net Income Common Stockholders
-1.32B	1.57B	2.04B	123.67M	375.76M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
0.00	889.90M	1.50B	439.27M	746.72M
	Total Assets
16.61B	18.27B	15.46B	10.97B	10.45B
	Total Debt
2.25B	4.31B	3.22B	2.39B	3.57B
	Net Debt
2.25B	3.42B	1.72B	1.95B	2.83B
	Total Liabilities
6.41B	8.61B	7.27B	5.17B	5.98B
	Stockholders Equity
9.96B	9.41B	7.98B	5.63B	4.27B
Cash Flow		Free Cash Flow
-983.72M	-823.96M	646.20M	-609.41M	-51.56M
	Operating Cash Flow
702.07M	1.33B	1.91B	344.26M	798.91M
	Investing Cash Flow
-1.57B	-2.78B	-1.42B	-666.59M	-863.57M
	Financing Cash Flow
1.24B	623.91M	611.89M	50.21M	177.26M

Albemarle Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 50.76
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 50.76 is below the 20-day moving average (MA) of 71.97, below the 50-day MA of 75.93, and below the 200-day MA of 88.65, indicating a bearish trend. The MACD of -1.48 indicates Positive momentum. The RSI at 37.95 is Neutral, neither overbought nor oversold. The STOCH value of 16.08 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ALB.

Albemarle Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EMN	75 Outperform	$8.72B	9.84	16.11%	4.45%	1.91%	2.94%
AVNT	68 Neutral	$2.79B	16.52	7.32%	3.47%	3.11%	123.46%
FUL	61 Neutral	$2.86B	26.57	6.35%	1.74%	0.99%	-27.62%
WLK	59 Neutral	$11.37B	19.06	5.76%	2.35%	-3.24%	24.29%
SQM	48 Neutral	$10.11B	―	-7.56%	3.72%	-39.35%	-120.09%
Sector *	47 Neutral	$2.32B	-2.86	-21.68%	3.65%	4.18%	-28.49%
ALB	43 Neutral	$6.88B	―	-12.18%	2.78%	-44.08%	-183.44%

Albemarle Corporate Events

Albemarle Appoints Donald LaBauve as Chief Accounting Officer

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.