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Albemarle (ALB) Gains on Strong Demand, Capacity Expansion

Albemarle Corporation ALB is benefiting from higher lithium prices and volumes, capacity expansion and cost-saving actions.

Shares of Albemarle, a Zacks Rank #1 (Strong Buy) stock, have gained 32.5% over the past year against the 12.2% decline of its industry.

 


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Albemarle is gaining 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, last month, raised its full-year 2022 guidance to reflect the completion of additional lithium contract renegotiations. It now expects net sales in the range of $5.8-$6.2 billion for 2022, up from the previous outlook of $5.2-$5.6 billion. Albemarle also sees adjusted earnings per share in the range of $12.30-$15, higher than the prior guidance of $9.25-$12.25. Adjusted EBITDA for the year is now forecast to be $2.2-$2.5 billion, up from the prior view of $1.7-$2 billion.

The lithium adjusted EBITDA for the full year 2022 is now projected to rise roughly 300% year over year, up from the earlier outlook. Average realized pricing is now anticipated to be up around 140% year over year resulting from the implementation of index-referenced, variable-price contracts and improved market pricing.

Albemarle 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.

The company is also benefiting from cost-saving and productivity initiatives. Its cost actions are expected to support its margins in 2022.

Albemarle remains committed to deliver incremental returns to its shareholders. The company has raised its annual dividend for the 28th straight year. Albemarle remains focused on maintaining its dividend payout. The company also remains committed to maintain adequate financial flexibility with ample liquidity.

 

 

Stocks to Consider

Other top-ranked stocks worth considering in the basic materials space include Nutrien Ltd. NTR, Cabot Corporation CBT and Allegheny Technologies Inc. ATI.

Nutrien, sporting a Zacks Rank #1, has an expected earnings growth rate of 174.6% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 22.9% 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 gained roughly 40% in a year.

Cabot, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 22.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 6% 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 14% over a year.

Allegheny has a projected earnings growth rate of 1,076.9% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 40.4% upward in the past 60 days.

Allegheny’s earnings beat the Zacks Consensus Estimate in the last four quarters. It has a trailing four-quarter earnings surprise of roughly 128.9%, on average. ATI has gained around 11% in a year and currently sports a Zacks Rank #1.


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Allegheny Technologies Incorporated (ATI): Free Stock Analysis Report
 
Albemarle Corporation (ALB): Free Stock Analysis Report
 
Cabot Corporation (CBT): Free Stock Analysis Report
 
Nutrien Ltd. (NTR): Free Stock Analysis Report
 
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