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Investing.com - KeyBanc Capital Markets downgraded Albemarle (NYSE:ALB) from Overweight to Sector Weight on Wednesday, citing the lithium producer’s recent market outperformance. According to InvestingPro data, the stock has shown strong returns over the last three months, though it currently trades below its 52-week high of $113.91.
The research firm noted that Albemarle shares have rallied approximately 24% since June 23, significantly outpacing the S&P 500’s 6% gain during the same period, creating an opportunity to reduce risk.
Despite the downgrade, KeyBanc maintained its long-term optimistic view on lithium demand, projecting 15-20% growth in coming years driven by electric vehicle adoption and energy storage systems.
The firm acknowledged that lithium prices have increased 22% since the end of May but does not expect this momentum to develop into a new price cycle over the next 6-12 months.
KeyBanc forecasts lithium carbonate prices in China to remain in the $8.50-$9.50/kg range in the near term, compared to the current price of $9.15/kg, while maintaining that current lithium prices are below reinvestment levels and therefore unsustainable in the long run.
In other recent news, Albemarle Corporation has been the focus of several analyst updates and financial developments. Berenberg analysts lowered their price target for Albemarle from $92 to $74, citing continued softness in lithium prices despite the company exceeding first-quarter EBITDA expectations by over 30%. Meanwhile, BofA Securities raised their price target to $93, highlighting Albemarle’s significant cost-cutting achievements, with approximately 90% of targeted savings realized. Baird, however, downgraded Albemarle to Underperform, expressing concerns that recent lithium price increases might be speculative rather than demand-driven.
In addition to analyst activity, Albemarle announced a quarterly dividend of $0.405 per share, payable on October 1, 2025, reflecting an annualized rate of $1.62 per share. These developments come amid a notable rally in Albemarle’s stock, which has surged nearly 50% over the past three months, partially driven by a short squeeze and bullish news from the Chinese lithium market. Albemarle’s cost-saving measures, combined with lower capital expenditures, are expected to support positive free cash flow in 2025. However, Berenberg predicts a challenging second quarter with EBITDA potentially falling 30% below current consensus estimates.
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