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Albemarle (ALB) Up 28% in 3 Months: What's Driving the Stock?

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Shares of Albemarle Corporation (ALB - Free Report) have been performing well of late. The chemical maker has seen its shares pop around 28% over the past three months. The company has also outperformed its industry’s gain of 12% to over the same time frame.  

Albemarle has a market cap of roughly $15.3 billion and average volume of shares traded in the last three months is around 1,424K. The company has an expected long-term earnings per share growth of 14.8%.

Let’s take a look into the factors that are driving this Zacks Rank #3 (Hold) stock of late.



 

Driving Factors

Upbeat prospects for its lithium business are driving Albemarle. The company remains committed to strengthen its lithium business and is well placed to leverage strong expected growth in the battery-grade lithium market.

China is considering an eventual ban on production and sales of cars that run on diesel or gasoline, per a report from the country’s official news agency Xinhua, released last month. The move is part of Beijing’s efforts to reduce carbon emissions and pollution and is also aimed at promoting the development of electric and hybrid vehicles. The news provided a boost to lithium stocks including Albemarle.

Albemarle is seeing significant momentum in its lithium business. Sales from its Lithium and Advanced Materials unit jumped 36% year over year to $317.9 million in the last reported quarter, supported by favorable pricing and higher sales volume.  

The buyout of the lithium assets of Jiangxi Jiangli New Materials Science and Technology Co. Ltd. has allowed Albemarle to supply premium lithium salts to an expanded global customer base and accelerated the company’s ability to meet its goal of capturing 50% of the growth in the lithium industry.

Moreover, Albemarle recently said that it has developed a novel technology that would allow it to increase annual lithium production in Chile on a sustainable basis to as much as 125,000 metric tons of lithium carbonate equivalent without requiring additional brine pumping at its facility in the Salar de Atacama.

The move is part of the company’s efforts to beef up efficiencies and sustainability of its Atacama operations. As a result, Albemarle has asked the Chilean Economic Development Agency, Corfo to increase its lithium production quota.

Albemarle noted that it intends to construct and start-up additional lithium carbonate capacity in Chile in the early 2020s once the present expansion projects are completed and operate at full capacity.

Projects currently underway are expected to raise the company’s total annual production capacity in Chile to more than 80,000 metric tons of lithium carbonate equivalent by 2020.

Albemarle Corporation Price and Consensus

 

Albemarle Corporation Price and Consensus | Albemarle Corporation Quote

Stocks to Consider

Better-ranked stocks in the basic materials space include Kraton Corporation , The Chemours Company (CC - Free Report) and Orion Engineered Carbons, S.A. (OEC - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kraton has expected earnings growth of 7.2% for the current year.

Chemours has expected long-term earnings growth of 15.5%.

Orion Engineered Carbons has expected earnings growth of 19% for the current year.

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