We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Albemarle (ALB) Shares Pop 50% in 6 Months: What's Driving It?
Read MoreHide Full Article
Albemarle Corporation’s (ALB - Free Report) shares have rallied 49.7% over the past six months. The rally has resulted in the stock outperforming its industry’s rise of 0.3% over the same time frame. The company has also topped the S&P 500’s 1.8% decline over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #1 (Strong Buy) stock.
Image Source: Zacks Investment Research
What’s Going in ALB’s Favor?
Forecast-topping earnings performance in the second quarter and upbeat outlook for 2022 have contributed to the run-up in the company's shares. Albemarle’s adjusted earnings of $3.45 per share for the quarter topped the Zacks Consensus Estimate of $3.03. Revenues climbed roughly 91% year over year to $1,479.6 million and surpassed the Zacks Consensus Estimate of $1,370.8 million. The company gained from higher pricing across its segments on the back of strong demand from diverse end markets.
Albemarle raised its net sales outlook for 2022 factoring in continued strength in pricing in its Lithium and Bromine businesses. The company envisions net sales for 2022 to be in the band of $7.1-$7.5 billion, up from $5.8-$6.2 billion it expected earlier. Adjusted EBITDA for the year is now forecast to be $3.2-$3.5 billion, up from the prior view of $2.2-$2.5 billion. Albemarle also sees adjusted earnings per share for 2022 in the band of $19.25-$22.25, up from $12.30-$15.00 it expected earlier.
Albemarle is benefiting from higher volumes in its lithium business on a recovery in global economic activities. Higher customer demand, new capacity and plant productivity improvements are supporting volumes. The La Negra III/IV expansion in Chile is also contributing to higher volumes. Strong 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 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.
Albemarle is also benefiting from cost-saving and productivity initiatives. Its cost actions are expected to support its margins in 2022.
Earnings estimates for Albemarle have also been going up over the past two months. The Zacks Consensus Estimate for 2022 has increased around 67.9%. The consensus estimate for the third quarter of 2022 has also been revised 86.2% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Other top-ranked stocks worth considering in the basic materials space include Daqo New Energy Corp. (DQ - Free Report) , Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) and The Chemours Company (CC - Free Report) .
Daqo New Energy, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 177.5% for the current year. The Zacks Consensus Estimate for DQ's earnings for the current fiscal has been revised 20.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Daqo New Energy’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 10.8%. DQ has gained around 24% over a year.
Sociedad has a projected earnings growth rate of 513.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 32.6% upward in the past 60 days.
Sociedad’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average being 28.2%. SQM has rallied roughly 85% in a year. The company carries a Zacks Rank #2 (Buy).
Chemours has a projected earnings growth rate of 40% for the current year. The Zacks Consensus Estimate for CC's current-year earnings has been revised 7.3% upward in the past 60 days.
Chemours’ earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 28.3%, on average. CC has gained around 19% in a year and currently carries a Zacks Rank #2.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Albemarle (ALB) Shares Pop 50% in 6 Months: What's Driving It?
Albemarle Corporation’s (ALB - Free Report) shares have rallied 49.7% over the past six months. The rally has resulted in the stock outperforming its industry’s rise of 0.3% over the same time frame. The company has also topped the S&P 500’s 1.8% decline over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #1 (Strong Buy) stock.
Image Source: Zacks Investment Research
What’s Going in ALB’s Favor?
Forecast-topping earnings performance in the second quarter and upbeat outlook for 2022 have contributed to the run-up in the company's shares. Albemarle’s adjusted earnings of $3.45 per share for the quarter topped the Zacks Consensus Estimate of $3.03. Revenues climbed roughly 91% year over year to $1,479.6 million and surpassed the Zacks Consensus Estimate of $1,370.8 million. The company gained from higher pricing across its segments on the back of strong demand from diverse end markets.
Albemarle raised its net sales outlook for 2022 factoring in continued strength in pricing in its Lithium and Bromine businesses. The company envisions net sales for 2022 to be in the band of $7.1-$7.5 billion, up from $5.8-$6.2 billion it expected earlier. Adjusted EBITDA for the year is now forecast to be $3.2-$3.5 billion, up from the prior view of $2.2-$2.5 billion. Albemarle also sees adjusted earnings per share for 2022 in the band of $19.25-$22.25, up from $12.30-$15.00 it expected earlier.
Albemarle is benefiting from higher volumes in its lithium business on a recovery in global economic activities. Higher customer demand, new capacity and plant productivity improvements are supporting volumes. The La Negra III/IV expansion in Chile is also contributing to higher volumes. Strong 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 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.
Albemarle is also benefiting from cost-saving and productivity initiatives. Its cost actions are expected to support its margins in 2022.
Earnings estimates for Albemarle have also been going up over the past two months. The Zacks Consensus Estimate for 2022 has increased around 67.9%. The consensus estimate for the third quarter of 2022 has also been revised 86.2% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Albemarle Corporation Price and Consensus
Albemarle Corporation price-consensus-chart | Albemarle Corporation Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Daqo New Energy Corp. (DQ - Free Report) , Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) and The Chemours Company (CC - Free Report) .
Daqo New Energy, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 177.5% for the current year. The Zacks Consensus Estimate for DQ's earnings for the current fiscal has been revised 20.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Daqo New Energy’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 10.8%. DQ has gained around 24% over a year.
Sociedad has a projected earnings growth rate of 513.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 32.6% upward in the past 60 days.
Sociedad’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average being 28.2%. SQM has rallied roughly 85% in a year. The company carries a Zacks Rank #2 (Buy).
Chemours has a projected earnings growth rate of 40% for the current year. The Zacks Consensus Estimate for CC's current-year earnings has been revised 7.3% upward in the past 60 days.
Chemours’ earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 28.3%, on average. CC has gained around 19% in a year and currently carries a Zacks Rank #2.