Albemarle (ALB) is facing "increased spot market risk" and its management has been building the company's resilience for it, Oppenheimer said in a Friday note.
"We are encouraged by the prospect of Albemarle being free cash flow positive in 2025, despite a higher percentage of spot sales and continued anemic spot prices," the investment firm said. According to Oppenheimer, Albemarle's cost cuts and spot prices' recovery from Q3 lows led to its improved Q4 gross margin.
Oppenheimer also said it expects lithium demand to remain robust, but sees a U-shaped recovery for prices as the sector halts capacity expansion with the backdrop of flat to higher in the US and the European Union and growing electric vehicle sales in China.
Oppenheimer lowered its price target on Albemarle's stock to $123, from $170 due to a cautious view on 2025 and 2026 pricing, while reiterating an outperform rating.
Price: 80.84, Change: +1.58, Percent Change: +2.00
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.