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Albemarle (ALB) Up 43% in 3 Months: What's Driving the Stock?
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Albemarle Corporation’s (ALB - Free Report) shares have popped 42.6% over the past three months. The rally has resulted in the stock outperforming its industry’s rise of 13.3% over the same time frame. The company has also topped the S&P 500’s 4.8% decline over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #1 (Strong Buy) stock.
Image Source: Zacks Investment Research
What’s Going in ALB’s Favor?
Forecast-topping earnings performance in the first quarter and upbeat outlook for 2022 have contributed to the rally in the company's shares. Albemarle’s adjusted earnings of $2.38 per share topped the Zacks Consensus Estimate of $1.73. It gained from higher pricing across its segments on the back of strong demand from diverse end markets.
Albemarle raised its net sales outlook for 2022 factoring in higher prices in lithium and bromine businesses. The company envisions net sales for 2022 to be between $5.2 billion and $5.6 billion, up from $4.2 billion and $4.5 billion it expected earlier. Adjusted EBITDA for the year is now forecast to be $1.7-$2 billion, up from the prior view of $1.15-$1.3 billion.
The company also sees adjusted earnings per share for 2022 in the band of $9.25-$12.25, up from $5.65-$6.65 it expected earlier. It noted that its full-year outlook has improved based on expectations of continued demand growth and the tightness in the markets it serves.
Albemarle is benefiting from higher volumes in its lithium business on continued recovery in global economic activities. Healthy customer orders, new capacity and plant productivity improvements are supporting volumes. Higher lithium prices are also supporting its performance. Tight supply conditions and growing demand for electric vehicles are driving lithium prices. The company’s bromine business is also gaining from strong demand and favorable pricing led by tight market conditions. Albemarle is seeing strong demand for flame retardants.
The company is also strategically executing its projects aimed at boosting its global lithium conversion capacity. It remains focused on investing in high-return projects to drive productivity. The company is well placed to gain from long-term growth in the battery-grade lithium market.
Albemarle is also benefiting from cost-saving and productivity initiatives. Its cost actions are expected to support its margins in 2022.
Earnings estimates for Albemarle have also been going up over the past two months. The Zacks Consensus Estimate for 2022 has increased around 100%. The consensus estimate for the second quarter of 2022 has also been revised 96.3% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Other top-ranked stocks worth considering in the basic materials space include Nutrien Ltd. (NTR - Free Report) , Allegheny Technologies Inc. (ATI - Free Report) and Cabot Corporation (CBT - Free Report) .
Nutrien, sporting a Zacks Rank #1, has an expected earnings growth rate of 163.4% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 27.5% upward over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 5.8%, on average. NTR has rallied 45% in a year.
Allegheny has a projected earnings growth rate of 869.2% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 23.5% upward in the past 60 days.
Allegheny’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 128.9%, on average. ATI has gained around 16% in a year and currently sports a Zacks Rank #1.
Cabot, currently carrying a Zacks Rank #2 (Buy), has an expected earnings growth rate of 21.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 5.2% upward in the past 60 days.
Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 20% over a year.
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Albemarle (ALB) Up 43% in 3 Months: What's Driving the Stock?
Albemarle Corporation’s (ALB - Free Report) shares have popped 42.6% over the past three months. The rally has resulted in the stock outperforming its industry’s rise of 13.3% over the same time frame. The company has also topped the S&P 500’s 4.8% decline over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #1 (Strong Buy) stock.
Image Source: Zacks Investment Research
What’s Going in ALB’s Favor?
Forecast-topping earnings performance in the first quarter and upbeat outlook for 2022 have contributed to the rally in the company's shares. Albemarle’s adjusted earnings of $2.38 per share topped the Zacks Consensus Estimate of $1.73. It gained from higher pricing across its segments on the back of strong demand from diverse end markets.
Albemarle raised its net sales outlook for 2022 factoring in higher prices in lithium and bromine businesses. The company envisions net sales for 2022 to be between $5.2 billion and $5.6 billion, up from $4.2 billion and $4.5 billion it expected earlier. Adjusted EBITDA for the year is now forecast to be $1.7-$2 billion, up from the prior view of $1.15-$1.3 billion.
The company also sees adjusted earnings per share for 2022 in the band of $9.25-$12.25, up from $5.65-$6.65 it expected earlier. It noted that its full-year outlook has improved based on expectations of continued demand growth and the tightness in the markets it serves.
Albemarle is benefiting from higher volumes in its lithium business on continued recovery in global economic activities. Healthy customer orders, new capacity and plant productivity improvements are supporting volumes. Higher lithium prices are also supporting its performance. Tight supply conditions and growing demand for electric vehicles are driving lithium prices. The company’s bromine business is also gaining from strong demand and favorable pricing led by tight market conditions. Albemarle is seeing strong demand for flame retardants.
The company is also strategically executing its projects aimed at boosting its global lithium conversion capacity. It remains focused on investing in high-return projects to drive productivity. The company is well placed to gain from long-term growth in the battery-grade lithium market.
Albemarle is also benefiting from cost-saving and productivity initiatives. Its cost actions are expected to support its margins in 2022.
Earnings estimates for Albemarle have also been going up over the past two months. The Zacks Consensus Estimate for 2022 has increased around 100%. The consensus estimate for the second quarter of 2022 has also been revised 96.3% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Albemarle Corporation Price and Consensus
Albemarle Corporation price-consensus-chart | Albemarle Corporation Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Nutrien Ltd. (NTR - Free Report) , Allegheny Technologies Inc. (ATI - Free Report) and Cabot Corporation (CBT - Free Report) .
Nutrien, sporting a Zacks Rank #1, has an expected earnings growth rate of 163.4% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 27.5% upward over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 5.8%, on average. NTR has rallied 45% in a year.
Allegheny has a projected earnings growth rate of 869.2% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 23.5% upward in the past 60 days.
Allegheny’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 128.9%, on average. ATI has gained around 16% in a year and currently sports a Zacks Rank #1.
Cabot, currently carrying a Zacks Rank #2 (Buy), has an expected earnings growth rate of 21.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 5.2% upward in the past 60 days.
Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 20% over a year.