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Investing.com - TD Cowen has raised its price target on Albemarle (NYSE:ALB) to $85.00 from $70.00 while maintaining a Hold rating on the lithium producer’s stock. Currently trading at $98.74, the stock has shown strong momentum with a 53.45% return over the past six months, according to InvestingPro data.
The firm expects Albemarle’s third-quarter 2025 EBITDA margins to decline quarter-over-quarter due to reduced volumes sold through long-term contracts, though the company should benefit slightly from higher spot carbonate prices, which increased 12% quarter-over-quarter, and spodumene prices, which rose 17%. InvestingPro analysis reveals the company’s current gross profit margin stands at 8.16%, reflecting ongoing profitability challenges.
TD Cowen projects third-quarter 2025 adjusted EBITDA of $133 million, which is 29% below the consensus estimate of $189 million, while forecasting revenues of $1.31 billion, 3% above the consensus of $1.27 billion.
The firm models third-quarter free cash flow of -$99 million, which would bring year-to-date free cash flow to $234 million, supported by a first-quarter 2025 customer prepayment of $350 million.
Albemarle’s stock price has increased 9% year-to-date, underperforming TD Cowen’s lithium peer group, which has gained 56% during the same period, with the stock currently trading at 13.7x 2025 estimated EBITDA and 12.4x 2026 estimated EBITDA versus 17.8x and 22.4x for the peer group. Despite recent challenges, the company maintains a strong dividend track record, having raised its dividend for 31 consecutive years, with a current yield of 1.77%. Get access to more valuable insights and 10+ additional ProTips with InvestingPro.
In other recent news, Albemarle Corporation has announced changes to its organizational structure, appointing Mark Mummert as chief operations officer to enhance operational efficiency. This move comes as the company continues to focus on improving its global manufacturing operations and joint venture management. In the financial sector, Bank of America has maintained its Buy rating on Albemarle, citing potential upside due to the recent rally in lithium prices. The bank forecasts that lithium carbonate spot prices could rise significantly in the coming years, reaching $20/kg by 2030.
Oppenheimer has also adjusted its price target for Albemarle to $109, up from $107, while maintaining an Outperform rating. This adjustment follows Albemarle’s strong quarterly results, though the company chose not to raise its existing guidance. Meanwhile, the global lithium market is experiencing tightening supply, as CATL’s Jianxiawo lithium mine in China has suspended operations after failing to secure a permit extension. This suspension affects approximately 2-3% of the global lithium supply, further influencing market dynamics. These developments underscore the growing demand and strategic importance of lithium in the global market.
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