SGML

Lithium Prices Remain Volatile; Albemarle Adjusts Long-term Demand Forecast

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Image: Albemarle’s shares have faced significant pressure as a result of depressed lithium prices. By Brian Nelson, CFA The Financial Times reported February 16 that Albemarle (ALB) had reduced its 2030 demand forecast for lithium due to a reduced pace of electric-vehicle adoption in the U.S. and Europe. According to reports from Seeking Alpha, Albemarle now believes that 3.3 million tons of lithium carbon equivalent [LCE] will be in demand across the globe by the end of this decade, a pace that is meaningfully lower than the 3.7 million tons it had projected previously. Albemarle is also dealing with plunging lithium prices, which have punished its cash flow more recently. We think most of the bad news is priced into … Read more

Albemarle and ASML Holding Remain Key ESG-Focused Ideas

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By Brian Nelson, CFA The investment landscape is fast changing, and investors want to invest how they want to invest. Custom approaches to meeting client needs have never been in greater demand. After all, the saying “there’s an ETF for that” has become as common as the saying “don’t put all your eggs in one basket.” There may be no greater or better investment than becoming more exposed to the sustainable trend of Environmental, Social and Governance [‘ESG’] investing, where ESG research points to key risks of a company that could have tremendous implications on its intrinsic value or fair value estimate distribution. For example, how should investors think about Johnson & Johnson’s (JNJ) talc exposure liabilities? What about 3M’s … Read more

Albemarle Is One of the Best Growth Stories on the Market Today

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Image: Albemarle is a low-cost producer of lithium derivatives, an end market that is expected to experience tremendous demand in the coming years. By Brian Nelson, CFA On August 2, Albemarle Corp. (ALB) reported excellent second-quarter 2023 results that showed net sales advancing 60% and adjusted diluted earnings per share more than doubling in the quarter. For the full-year 2023, net sales are now expected to be between $10.4-$11.5 billion (was $9.8-$11.5 billion) thanks in part to continued strength in electric vehicle (EV) demand. Our fair value estimate for Albemarle stands at $257 per share, well above where shares are currently trading. We think the market is underestimating not only its growth potential but also mid-cycle levels of profitability. Albemarle … Read more

Albemarle Is Looking to Buy Australian Lithium Start Up

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Image: Albemarle’s shares have faced pressure as lithium prices are expected to moderate in the near term. We continue to like Albemarle’s long-term story, however. By Brian Nelson, CFA On March 27, it became public that lithium maker Albemarle (ALB) is looking to bolster its future opportunities on the acquisition front, seeking to scoop up a smaller Australian lithium start-up Liontown Resources (LINRF). Though Liontown rejected the offer, other lithium stocks, including Standard Lithium (SLI), Sigma Lithium (SGML), Piedmont Lithium (PLL) and Lithium Americas (LAC) soared on the news. According to the firm’s website, Liontown’s project in Western Australia in Kathleen Valley is expected to be one of the world’s largest lithium mines, “supplying ~500,000 tonnes of 6% lithium oxide … Read more

Albemarle Outlines Strong Lithium Demand Outlook

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  Image Source: Albemarle By Brian Nelson, CFA Albemarle Corporation (ALB) released preliminary fourth-quarter numbers for revenue and earnings on January 23 that came in better than the consensus estimate. Net sales in the quarter are expected in the range of $2.59-$2.65 billion, up 190% to 196%, while adjusted diluted earnings per share is targeted in the range of $8.35-$8.75, up 727% to 766%. We’ll get final results for the fourth quarter on February 15, but clearly Albemarle is doing a lot of things right to put up such fantastic growth rates. For those just getting familiar with key ideas in the simulated ESG Newsletter portfolio, here is some background on Albemarle’s operations from its most recent Form 10-K; note … Read more

Albemarle Raises Guidance Yet Again, Expects to Be FCF Positive in 2022

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Image Shown: Albemarle Corporation’s lithium operations have posted stellar financial performance in recent quarters and underpin the firm’s bright long-term growth outlook. Image Source: Albemarle Corporation – Second Quarter of 2022 IR Earnings Presentation By Callum Turcan On August 3, Albemarle Corporation (ALB) reported second quarter 2022 earnings that matched consensus top-line estimates and beat consensus bottom-line estimates. Albemarle produces lithium derivatives such as lithium carbonate and lithium hydroxide that are used to produce lithium-ion batteries. The firm also produces bromine, which is used as a fire retardant in a wide variety of products, and catalysts for the refining industry. The company once again raised its full-year guidance for 2022 during its second quarter earnings update. Albemarle also raised its … Read more