Albemarle (ALB) Valuation Check After New Cesium Supply Deal with Power Metals

Albemarle (ALB) just locked in cesium supply from Power Metals through an offtake and prepayment deal, a strategic move that quietly broadens its specialty chemicals toolkit while lithium pricing remains under pressure.

See our latest analysis for Albemarle.

The cesium deal lands as Albemarle’s 90 day share price return of 63.36 percent and year to date share price return of 55.13 percent signal that momentum is rebuilding, even though the three year total shareholder return of negative 40.75 percent shows long term holders are still underwater.

If Albemarle’s rebound has your attention, this could be a good moment to see what else is gaining traction in energy transition supply chains and related fast growing stocks with high insider ownership.

With lithium prices still soft, a fresh cesium stream, rapid earnings recovery and a share price already well off the bottom, is Albemarle quietly undervalued here, or are investors already paying up for the next leg of growth?

Most Popular Narrative: 23.4% Overvalued

With Albemarle last closing at $132.22 against a narrative fair value near $107, the story points to a stretched valuation built on a demanding recovery path.

Analysts expect earnings to reach $1.1 billion (and earnings per share of $9.09) by about September 2028, up from $-1.1 billion today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $-165.3 million.

Read the complete narrative.

Curious what kind of revenue trajectory, margin rebuild and future earnings multiple have to line up to make this price tag add up? The narrative lays out an aggressive profitability turnaround, a sharp swing in margins and a valuation multiple that still undercuts the wider sector, but the full equation is only visible once you see how those moving parts stack together.

Result: Fair Value of $107.14 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, prolonged low lithium prices or extended industry oversupply could derail the expected margin rebuild and delay the recovery implied in today’s valuation.

Find out about the key risks to this Albemarle narrative.

Build Your Own Albemarle Narrative

If you see the path differently or want to stress test your own assumptions with the same toolkit, you can build a custom view in minutes: Do it your way

A good starting point is our analysis highlighting 1 key reward investors are optimistic about regarding Albemarle.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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