Mizuho cuts Albemarle stock price target to $90 from $105

On Thursday, Mizuho (NYSE:MFG) Securities adjusted its outlook on Albemarle Corporation (NYSE:ALB), a leading producer of lithium, by reducing its price target from $105.00 to $90.00, while keeping a Neutral rating on the stock. The revision follows the company’s disclosure of its adjusted EBITDA for the December quarter of 2024, which came in at $251 million, surpassing both Mizuho Securities USA’s estimate of $215 million and the consensus of $180 million. According to InvestingPro data, ALB currently trades near its 52-week low of $71.97, though analysis suggests the stock may be undervalued at current levels. Despite recent challenges, the company maintains a strong financial position with a healthy current ratio of 2.44.

The report from Mizuho detailed several potential scenarios for Albemarle’s performance, based on varying prices per kilogram of lithium carbonate equivalent (LCE). The scenarios ranged from a low of $9/kg to a high of $20/kg, with corresponding EBITDA forecasts from $0.9 billion to $2.6 billion. The new estimates by Mizuho place Albemarle’s expected 2025 EBITDA at $1.13 billion, which is close to the lower end of the projected outcomes and slightly below the Bloomberg consensus of $1.15 billion. InvestingPro analysis reveals that while the company faces near-term profitability challenges with negative gross margins, it maintains a remarkable 31-year track record of consecutive dividend increases, demonstrating long-term financial resilience. Get access to 10+ additional exclusive ProTips and comprehensive analysis with an InvestingPro subscription.

Albemarle’s guidance for mid-point lithium volume growth in 2025 is approximately 5%. The company has also expressed confidence in reaching a free cash flow break-even point if LCE prices remain around $9/kg. This outlook is based on the company’s performance in the December quarter of 2024, which saw a 19.5% increase in lithium volume, contributing to year-over-year improvements across all segments.

In light of these considerations, Mizuho has also revised its EBITDA predictions for the years 2025 and 2026 to $1.13 billion and $1.41 billion, respectively. These figures represent a decrease from the previous forecasts of $1.3 billion for 2025 and $1.7 billion for 2026. The reduced price target reflects Mizuho’s updated estimates and the current market conditions surrounding Albemarle’s business.

In other recent news, Albemarle Corporation has been the subject of numerous analyst reviews and market developments. Evercore ISI downgraded Albemarle’s stock from Outperform to In Line, setting a new price target at $88. This was based on a cautious outlook on the lithium market and concerns about Albemarle’s EBITDA projections for 2025.

Simultaneously, Truist Securities initiated coverage of Albemarle with a Hold rating and a $96 price target, highlighting the company’s strong position in the lithium market but expressing concerns about potential oversupply issues.

Baird maintained a Neutral rating on Albemarle, raising its price target to $103 from $79, acknowledging the company’s cost-saving measures but expressing caution due to the current state of pricing and anticipated demand for electric vehicles and lithium.

Jefferies reiterated a Buy rating for Albemarle, increasing the price target from $120 to $130, highlighting the company’s structural changes and margin improvements.

Lastly, Albemarle, along with other companies with significant ties to China, experienced a rally in response to China’s shift towards more accommodating monetary and fiscal policies. These recent developments provide investors with a comprehensive view of Albemarle’s current market standing.

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