Albemarle Corporation (ALB) | Investment Case

1. Company Snapshot

1.a. Company Description

Albemarle Corporation develops, manufactures, and markets engineered specialty chemicals worldwide.It operates through three segments: Lithium, Bromine, and Catalysts.The Lithium segment offers lithium compounds, including lithium carbonate, lithium hydroxide, lithium chloride, and lithium specialties; and reagents, such as butyllithium and lithium aluminum hydride for use in lithium batteries for consumer electronics and electric vehicles, high performance greases, thermoplastic elastomers for car tires, rubber soles, plastic bottles, catalysts for chemical reactions, organic synthesis processes in the areas of steroid chemistry and vitamins, life sciences, pharmaceutical industry, and other markets.

It also provides cesium products for the chemical and pharmaceutical industries; zirconium, barium, and titanium products for pyrotechnical applications that include airbag initiators; technical services for the handling and use of reactive lithium products; and lithium-containing by-products recycling services.The Bromine segment offers bromine and bromine-based fire safety solutions; specialty chemicals, including elemental bromine, alkyl and inorganic bromides, brominated powdered activated carbon, and other bromine fine chemicals for use in chemical synthesis, oil and gas well drilling and completion fluids, mercury control, water purification, beef and poultry processing, and other industrial applications; and other specialty chemicals, such as tertiary amines for surfactants, biocides, and disinfectants and sanitizers.The Catalysts segment provides hydroprocessing, isomerization, and akylation catalysts; fluidized catalytic cracking catalysts and additives; and organometallics and curatives.

The company serves the energy storage, petroleum refining, consumer electronics, construction, automotive, lubricants, pharmaceuticals, and crop protection markets.Albemarle Corporation was founded in 1887 and is headquartered in Charlotte, North Carolina.

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1.b. Last Insights on ALB

Albemarle Corporation's recent performance was driven by forecast-topping earnings, Energy Storage volume growth, and cost cuts. The company's Q4 earnings were likely boosted by cost and productivity actions, higher volumes, and a recovery in lithium prices. Analysts have raised their price targets, citing improving lithium pricing and ongoing cost initiatives. The company's $3.5B liquidity and rising cash flow also signal strength for future shareholder returns. Additionally, several institutional investors have recently bought stakes in the company.

1.c. Company Highlights

Last Price	171.22
Change Percentage	1.36%
Open	171.8
Previous Close	168.92
Market Cap ( Millions)	20178
Volume	2193460
Year High	195.69
Year Low	49.43
M A 50	156.6
M A 200	99.01

FCF Yield	3.43%
Dividend Yield	0.95%
ROE	-5.13%
Debt / Equity	34.58%
Net Debt / EBIDTA	223.92%
Price To Book	2.11
Price Earnings Ratio	-39.47
Price To FCF	29.14
Price To sales	3.92
EV / EBITDA	29.16

2. Albemarle's Q4 2025 Earnings: A Strong Finish to a Record Year

Albemarle Corporation reported Q4 2025 net sales of $1.4 billion, up 16% year-over-year, with adjusted EBITDA of $269 million, up 7%. For the full year 2025, net sales were $5.1 billion and adjusted EBITDA was $1.1 billion. The company's actual EPS came out at -$0.53, relative to estimates at -$0.4. The financial performance was driven by growth in the Energy Storage segment, which achieved record production, and the company's efforts to reduce costs and improve productivity.

Publication Date: Feb -15

                                    📋 Highlights
                                    Q4 2025 Net Sales Growth:
                                                Net sales rose 16% YoY to $1.4 billion, with adjusted EBITDA up 7% to $269 million.
2030 Lithium Demand Outlook:
                                                Global demand projected at 2.8–3.6 million tons by 2030, a 10% increase from prior forecasts.
2026 Cost Improvements:
                                                $100–150 million in cost/productivity gains expected, alongside $660 million pretax from Ketjen stake sale in Q1 2026.
Greenbushes Expansion:
                                                CGP3 project adds 35,000 tons/year capacity (LCE), boosting lithium resources 10% YoY.
Energy Storage Margins:
                                                Mid-50s EBITDA margin anticipated in Q2 2026 at current lithium prices ($10/kg LCE).

                                

Operational Highlights

The company idled operations at its Kemerton lithium hydroxide plant, expecting it to be accretive to adjusted EBITDA in Q2 2026. Albemarle also expects to close the sale of a majority stake in Ketjen to KPS Capital Partners in Q1 2026, generating approximately $660 million in pretax proceeds. The company's lithium mineral resources increased 10% year-over-year, led by improvements at Greenbushes, where the CGP3 expansion is ramping up, adding 35,000 tons per year to capacity on an LCE basis.

Outlook and Guidance

For 2026, Albemarle expects net sales and adjusted EBITDA growth, with cost and productivity improvements of $100-150 million. The company provides outlook ranges for various lithium market price scenarios, expecting Energy Storage adjusted EBITDA margin to improve at $10/kg LCE, and total company margins to lift to the low 40% and mid-50% range at $20/kg LCE and $30/kg LCE, respectively. The company's guidance suggests that it is well-positioned to benefit from growing lithium demand, driven by the electric vehicle market and energy storage systems.

Valuation and Metrics

Albemarle's current valuation metrics, including a P/E Ratio of -35.45, P/B Ratio of 2.05, and EV/EBITDA of 95.83, suggest that the market is pricing in significant growth expectations. The company's Net Debt / EBITDA ratio of 7.13 indicates a relatively high level of leverage, but its focus on deleveraging and strengthening its financial profile is expected to improve this metric over time. Analysts estimate next year's revenue growth at 7.0%, which is relatively modest compared to the company's historical growth rate.

Lithium Demand and Market Trends

The company updated its lithium demand outlook, expecting 2030 global lithium demand to be 2.8-3.6 million tons, up 10% from the previous forecast. Albemarle is bullish on lithium demand growth, driven by the electric vehicle market and energy storage systems. The company expects solid-state batteries to be a positive driver for lithium demand, but notes that it will take time to mature. Sodium-ion batteries will be a technical player in the market, but will have to overcome challenges related to energy density and scalability.

3. NewsRoom

Trump's $550B Japan Deal Puts LNG, GE Vernova, And Rare Earth Stocks In Focus

Feb -18

Source: benzinga.com

Albemarle upgraded on improved lithium pricing and cost-savings initiatives

Feb -17

Source: proactiveinvestors.com

Market Movers: Citi Bullish on NVDA Heading into Earnings

Feb -17

Source: 247wallst.com

Here Are Tuesday’s Top Wall Street Analyst Research Calls: Albemarle, BitGo Holdings, Chevron, Dollar General, Equifax, Shopify, Southwest Airlines, Visa, and More

Feb -17

Source: 247wallst.com

Albemarle Announces Idling of Operations at Kemerton Processing Plant

Feb -16

Source: zacks.com

Is Albemarle Setting Up for a Lithium-Fueled Rebound?

Feb -12

Source: marketbeat.com

Albemarle Corporation (ALB) Q4 2025 Earnings Call Transcript

Feb -12

Source: seekingalpha.com

ALB Q4 Earnings Miss, Revenues Beat on Higher Volumes & Pricing

Feb -12

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.36%)

6. Segments

Energy Storage

Expected Growth: 5%

Albemarle's Energy Storage segment growth is driven by increasing adoption of electric vehicles, renewable energy integration, and grid modernization. Strong demand for lithium-ion batteries, particularly in the electric vehicle market, is a key growth catalyst. Additionally, government incentives and investments in clean energy infrastructure are fueling growth in this segment.

Specialties

Expected Growth: 3%

Albemarle's 3% growth in Specialties is driven by increasing demand for lithium-based battery materials, growth in the electric vehicle market, and rising adoption of clean energy technologies. Additionally, the company's investments in research and development, as well as its strategic acquisitions, have expanded its product offerings and enhanced its market position.

Ketjen

Expected Growth: 2%

Ketjen's 2% growth is driven by increasing demand for clean fuels, stringent environmental regulations, and Albemarle's strategic expansion into high-growth markets. Additionally, the segment benefits from its diversified customer base, long-term contracts, and continuous R&D investments, ensuring a steady supply of innovative catalysts and services.

7. Detailed Products

Lithium

Albemarle's Lithium segment produces lithium and its derivatives, which are used in a wide range of applications, including lithium-ion batteries for electric vehicles and consumer electronics, as well as in ceramics, glass, and pharmaceuticals.

Bromine

Albemarle's Bromine segment produces bromine and its derivatives, which are used in various applications, including flame retardants, water treatment, and oil and gas well completion fluids.

Refinery Catalysts

Albemarle's Refinery Catalysts segment produces catalysts used in the refining of crude oil to produce gasoline, diesel fuel, and other petroleum products.

Performance Catalyst Solutions

Albemarle's Performance Catalyst Solutions segment produces catalysts used in the production of polyethylene and polypropylene, as well as in the purification of hydrogen and other gases.

Curia

Albemarle's Curia segment provides contract development and manufacturing services for the pharmaceutical and biotech industries.

8. Albemarle Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Albemarle Corporation's lithium business has a moderate threat of substitutes due to the availability of alternative energy storage technologies, such as lead-acid batteries and fuel cells. However, lithium-ion batteries remain the dominant technology in the electric vehicle market, reducing the threat of substitutes.

Bargaining Power Of Customers

Albemarle Corporation's customers, primarily automotive manufacturers, have limited bargaining power due to the company's strong market position and the lack of alternative suppliers of high-quality lithium.

Bargaining Power Of Suppliers

Albemarle Corporation's suppliers of raw materials, such as spodumene and lithium chloride, have moderate bargaining power due to the company's dependence on these inputs and the limited number of suppliers.

Threat Of New Entrants

The threat of new entrants in the lithium market is low due to the high barriers to entry, including the need for significant capital investment, technical expertise, and established relationships with customers.

Intensity Of Rivalry

The intensity of rivalry in the lithium market is high due to the presence of established competitors, such as SQM and FMC, and the ongoing competition for market share and pricing power.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	30.31%
Debt Cost	3.95%
Equity Weight	69.69%
Equity Cost	12.21%
WACC	9.71%
Leverage	43.48%

11. Quality Control: Albemarle Corporation passed 4 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

WD-40

A-Score: 4.8/10

Value: 1.5

Growth: 6.0

Quality: 8.5

Yield: 3.0

Momentum: 1.0

Volatility: 8.7

1-Year Total Return ->

Axalta Coating Systems

A-Score: 4.7/10

Value: 5.3

Growth: 5.6

Quality: 7.0

Yield: 0.0

Momentum: 2.5

Volatility: 7.7

1-Year Total Return ->

Quaker Chemical

A-Score: 4.6/10

Value: 5.9

Growth: 6.2

Quality: 3.5

Yield: 3.0

Momentum: 3.5

Volatility: 5.3

1-Year Total Return ->

Avient

A-Score: 4.5/10

Value: 5.4

Growth: 3.2

Quality: 4.0

Yield: 7.0

Momentum: 1.5

Volatility: 6.0

1-Year Total Return ->

Albemarle

A-Score: 3.8/10

Value: 4.0

Growth: 3.4

Quality: 3.3

Yield: 2.0

Momentum: 7.5

Volatility: 2.7

1-Year Total Return ->

Avantor

A-Score: 3.4/10

Value: 6.4

Growth: 5.8

Quality: 3.3

Yield: 0.0

Momentum: 1.0

Volatility: 3.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

13.23%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.71%

Albemarle Corporation - US0126531013

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ALB

1.c. Company Highlights

Higher Growth

Weak Momentum

Average Quality

Earnings Miss

Revenues Miss

Earnings Beats

Fairly Valued

Revenues Beats

Cheaper

Lower Quality

Stable Momentum

Medium Volatility

2. Albemarle's Q4 2025 Earnings: A Strong Finish to a Record Year

Operational Highlights

Outlook and Guidance

Valuation and Metrics

Lithium Demand and Market Trends

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.36%)

6. Segments

Energy Storage

Expected Growth: 5%

Specialties

Expected Growth: 3%

Ketjen

Expected Growth: 2%

7. Detailed Products

Lithium

Bromine

Refinery Catalysts

Performance Catalyst Solutions

Curia

8. Albemarle Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Albemarle Corporation passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

171.22$

Current Price

171.22$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA