Albemarle Corp. (ALB)

Albemarle (ALB) stock fell down by 17.87% as investors perceive the lithium producer's latest move as reflective of mounting challenges in the industry. The world's largest lithium producer is raising funds to support growth capital expenditures, among other needs, indicating the continued difficulty in the business environment for lithium companies.

• Albemarle's Fundraising Plan: Albemarle announced its plan to sell $1.75 billion worth of depositary shares, with each representing a 1/20th interest in mandatory convertible preferred stock. The company intends to list the depositary shares on the New York Stock Exchange and expects to use the proceeds for general corporate purposes, including funding growth projects such as the construction and expansion of operations in Australia and Chile.
• Impact on Albemarle Stock: The company experienced rapid growth until lithium prices began to decline in 2023. In the fourth quarter of 2023, Albemarle's net sales dropped 10% year over year, resulting in a net loss of $618 million compared to a profit of $1.1 billion in the previous year, primarily due to low lithium prices. Despite ending 2023 with record sales of $9.6 billion, Albemarle expects lower sales in 2024, ranging from $6.9 billion to $7.6 billion, even at its highest projected lithium prices. If lithium prices do not recover, Albemarle's sales could decrease by at least 35% in 2024.
• Financial Outlook: While Albemarle had cash and equivalents of nearly $890 million as of December 31, 2023, it expects to spend $1.6 billion to $1.8 billion in capital expenditures in 2024, down from $2.1 billion in 2023, as management prioritizes projects nearing completion. The company's cash flows for the year may not be sufficient to fund growth, prompting the move to raise additional funds.

Albemarle (ALB) stock dropped by 6.72% due to the announcement of a proposed offering from the lithium producer after the bell on Monday.

• Details of the Offering: Albemarle has initiated an offering of $1.75 billion of depositary shares in an underwritten registered public offering. The company also plans to grant the underwriters a 30-day option to purchase up to an additional $262.5 million of its depositary shares.
• Intended Use of Proceeds: The net proceeds from the offering are intended for general corporate purposes, including funding growth capital expenditures such as the construction and expansion of lithium operations in Australia and China, as well as repaying the company's outstanding commercial paper.

Shares of Albemarle Corp. (ALB) dropped by 5.60% from $119.98 to $113.26 in the trading on Tuesday, December 5, 2023. The reason why ALB is down today is due to an updated outlook provided by Piper Sandler, which had an impact on the chemical company's shares.

• Analyst Downgrade: Piper Sandler analyst Charles Neivert downgraded ALB stock from a Neutral" rating to an Underweight rating. It's worth noting that the analysts' consensus rating for ALB stock is categorized as Hold based on the opinions of 19 analysts.
• Revised Price Target: In addition to the downgrade, Neivert reduced the firm's price target for ALB stock from $140 per share to $128 per share. While this still represents a potential upside of 6.7% for the stock, it falls significantly below the analysts' consensus price prediction of $230.95 per share.

Shares of Albemarle Corp. (ALB) dropped by 6.28% from $128.87 to $120.78 in the trading on Monday, November 27, 2023. The reason why ALB is down today is due to a significant downturn in China's lithium market, where prices hit a 26-month low due to an unexpected surge in supply. The drop in lithium prices was driven by increased domestic production and reduced raw material costs. A trial delivery to the Guangzhou Futures Exchange revealed an unexpected surplus of lithium, leading to a 10% weekly price decrease, following a 7% drop the previous week. This unexpected turn in the lithium market impacted Albemarle Corporation, an American specialty chemicals company with a division dedicated to lithium production, thus affecting ALB's stock price.

Albemarle Corporation Stock (ALB) dropped by 2.39% from $116.98 to $114.19 in the trading on Monday November 13, 2023. The reason why ALB stock down today is due to Exxon Mobil's lithium push. Lithium producer Albemarle Corp is facing selling pressure today due to Exxon Mobil's recent announcement to enter the lithium market. Exxon Mobil plans to become a leading lithium supplier by 2030 and has already begun work on its first phase of lithium production in Arkansas. The company expects lithium demand to quadruple by 2030, and its new lithium offering will be branded as "Mobil Lithium".

Shares of Albermarle Corporation (ALB) dropped by 6.66% from $127.92 to $119.46 in the trading on Monday, November 6, 2023. The reason why ALB down is due to analyst activity:

• Analyst Price Targets: Twelve analysts tracking Albemarle have set an average price target of $216.75, significantly higher than the current stock price of $120.545. This implies potential upside for the stock.
• Analyst Sentiment: The sentiment of these 12 analysts over the past 3 months reveals their outlook on Albemarle. An increased number of bullish ratings indicates a positive outlook, while a higher number of bearish ratings suggests a negative sentiment.
• Decrease in Average Price Target: It's worth noting that the current average price target of $216.75 represents an 18.24% decrease from the previous average target of $265.09, which may have contributed to the stock's decline.

Shares of Albemarle Corporation (ALB) dropped by 5.23% from $134.44 to $127.41 in the trading on Monday, October 30, 2023. The reasons why ALB stock down include:

• Analyst Downgrades on Weaker EV Demand: ALB's stock was affected by analyst downgrades, primarily due to a slowdown in electric vehicle (EV) demand driven by macroeconomic factors, including a slowing global economy and higher interest rates. Tesla CEO Elon Musk's remarks about high car prices contributing to reduced EV demand were noteworthy. The decrease in EV demand impacts ALB as a lithium producer, leading to lower lithium demand for EV batteries and resulting in target price reductions.
• Lithium Oversupply Concerns: The lithium industry faced challenges with oversupply. Despite increased lithium production, high prices led buyers to deplete existing inventories, reducing demand for new lithium products. Benchmark lithium prices plummeted from about $80,000 to $25,000 per metric ton over the past year. Consequently, ALB and Livent shares both experienced significant declines of approximately 50% during this period.
• Expectations of Disappointing Q3 Earnings: ALB faced expectations of disappointing third-quarter 2023 earnings due to lower lithium prices. While ALB had beaten earnings estimates in the previous four quarters, concerns arose about its third-quarter performance. Although ALB benefited from higher lithium volumes and cost-cutting measures, headwinds in its specialties segment were a concern.

Shares of Albemarle Corporation (ALB) dropped by 9.79% from $169.48 to $152.89 in the trading on Wednesday, October 18, 2023. The reason why ALB stock down is due to a downgrade from BofA Securities, who shifted the rating from Neutral to Underperform and lowered the target price from $212 to $161. This downgrade raised concerns about Albemarle's growth plans, potentially requiring over $2 billion in debt financing over the next two years, which could negatively impact earnings and valuation.

Albemarle, a chemicals manufacturing company, saw a 6.5% decrease in its stock value after Bank of America downgraded it to "underperform" from "neutral". The bank also reduced its price target to $195, indicating that the stock may experience a decline of approximately 7% from the previous day's closing price.

https://www.barrons.com/articles/albemarle-stock-livent-lithium-pricing-11c5fb72