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Albemarle Corporation’s (ALB - Free Report) shares have popped 42% over the past three months. The company has also outperformed its industry’s decline of 0.1% over the same time frame. Moreover, it has topped the S&P 500’s 6.7% 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?
Albemarle is benefiting from higher volumes in its lithium business on a recovery in global economic activities. Higher customer demand, new capacity and plant productivity improvements are supporting volumes. The La Negra III/IV expansion in Chile is also contributing to higher volumes.
Strong lithium prices are also supporting ALB’s 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.
Albemarle raised its net sales outlook for 2022 factoring in continued strength in pricing in its Lithium and Bromine businesses. The company envisions net sales for 2022 to be in the band of $7.1-$7.5 billion, up from $5.8-$6.2 billion expected earlier. Adjusted EBITDA for the year is now forecast to be $3.2-$3.5 billion, up from the prior view of $2.2-$2.5 billion. Albemarle also sees adjusted earnings per share for 2022 in the band of $19.25-$22.25, up from $12.30-$15.00 it expected earlier.
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 9%. The consensus estimate for 2023 has also been revised 11.1% 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 Ryerson Holding Corporation (RYI - Free Report) , Brigham Minerals, Inc. and Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) .
Ryerson Holding, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 74.2% for the current year. The Zacks Consensus Estimate for RYI's earnings for the current year has been revised 3.2% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ryerson Holding’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 28.9%. RYI has gained around 31% over a year.
Brigham Minerals, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 150.9% for the current year. The consensus estimate for MNRL's earnings for the current year has been revised 7.8% upward in the past 60 days.
Brigham Minerals’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 13.9%. MNRL has gained around 35% over a year.
Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 18.8% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 74% in a year. The company currently carries a Zacks Rank #2 (Buy).
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Albemarle (ALB) Shares Rally 42% in 3 Months: What's Driving It?
Albemarle Corporation’s (ALB - Free Report) shares have popped 42% over the past three months. The company has also outperformed its industry’s decline of 0.1% over the same time frame. Moreover, it has topped the S&P 500’s 6.7% 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?
Albemarle is benefiting from higher volumes in its lithium business on a recovery in global economic activities. Higher customer demand, new capacity and plant productivity improvements are supporting volumes. The La Negra III/IV expansion in Chile is also contributing to higher volumes.
Strong lithium prices are also supporting ALB’s 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.
Albemarle raised its net sales outlook for 2022 factoring in continued strength in pricing in its Lithium and Bromine businesses. The company envisions net sales for 2022 to be in the band of $7.1-$7.5 billion, up from $5.8-$6.2 billion expected earlier. Adjusted EBITDA for the year is now forecast to be $3.2-$3.5 billion, up from the prior view of $2.2-$2.5 billion. Albemarle also sees adjusted earnings per share for 2022 in the band of $19.25-$22.25, up from $12.30-$15.00 it expected earlier.
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 9%. The consensus estimate for 2023 has also been revised 11.1% 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
Other Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Ryerson Holding Corporation (RYI - Free Report) , Brigham Minerals, Inc. and Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) .
Ryerson Holding, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 74.2% for the current year. The Zacks Consensus Estimate for RYI's earnings for the current year has been revised 3.2% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ryerson Holding’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 28.9%. RYI has gained around 31% over a year.
Brigham Minerals, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 150.9% for the current year. The consensus estimate for MNRL's earnings for the current year has been revised 7.8% upward in the past 60 days.
Brigham Minerals’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 13.9%. MNRL has gained around 35% over a year.
Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 18.8% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 74% in a year. The company currently carries a Zacks Rank #2 (Buy).