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Albemarle (ALB) Surges 5.9%: Is This an Indication of Further Gains?

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Albemarle (ALB - Free Report) shares soared 5.9% in the last trading session to close at $183.96. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 20.2% loss over the past four weeks.

ALB’s rally appears to reflect a recovery in its shares from a 10% slump on Friday after Chile unveiled plans to nationalize the country’s lithium mining industry. The recovery came after ALB reportedly said that the plan will not have any material impact on its operations in the country.

This specialty chemicals company is expected to post quarterly earnings of $6.93 per share in its upcoming report, which represents a year-over-year change of +191.2%. Revenues are expected to be $2.74 billion, up 142.7% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Albemarle, the consensus EPS estimate for the quarter has been revised 10.2% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on ALB going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Albemarle belongs to the Zacks Chemical - Diversified industry. Another stock from the same industry, Compass Minerals (CMP - Free Report) , closed the last trading session 1.2% higher at $32.29. Over the past month, CMP has returned 2.1%.

For Compass, the consensus EPS estimate for the upcoming report has changed -4.4% over the past month to $0.53. This represents a change of +60.6% from what the company reported a year ago. Compass currently has a Zacks Rank of #3 (Hold).


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