Albemarle Corporation (NYSE:ALB) shares are expected to remain under pressure until there is visibility on the lithium price floor, any supply response to lower prices, and improvement in the electric vehicle (EV) demand outlook, according to UBS analysts.
In an update to clients, the analysts lowered their price target on Albemarle stock to $130 per share from $140 previously, with a ‘Neutral’ rating, reflecting a reduced lithium price level in 2024.
Their cautious outlook has led them to reduce Albemarle’s estimated 2024 realized lithium price to about $22 per kilogram, from about $26 per kilogram, with a long-term assumption of about $24 per kilogram from about $26 per kilogram previously.
Analysts at UBS noted, though, that despite anticipated near-term lithium price volatility they are still factoring in about 23% to 25% annual lithium demand growth from 2024 to 2026, as more supply will still be needed.
Shares of Albemarle fell 5% to $113.68 in late-afternoon trading on Tuesday and are down 47% year to date.
Contact Sean at sean@proactiveinvestors.com