Albemarle’s Earnings Are In—Is the Stock a Buy Now?

Key Points

• Recently, after reporting its quarterly earnings, shares of Albemarle were slightly up in the after-hours to show investors that there's a new potential upside.
• With plenty of tailwinds at its back, the company can still push double-digit upside potential from here.
• Wall Street analysts and institutional buyers agree with this outlook, making it a fantastic risk-to-reward trade.

Investors are typically – and justifiably – careful about investing in any given stock around the company’s earnings season since volatility is usually elevated for the days before, during, and after the financial announcements. However, every once in a while, the market will give out unmissable opportunities to make a swing for a given stock on its earnings announcements with very little relative risk.

Today’s opportunity comes filled with several tailwinds on both a fundamental and technical level, giving investors a chance they need to expose their portfolios to one of the best potential swings for this first-quarter earnings season, one that has already responded relatively well despite a not-so-great overall result on the part of the company. However, within what seems to be a bearish report, some found a gem to be had in the coming months.

This gem is found in shares of Albemarle Co. NYSE: ALB, a lithium mining company with lots of upside potential according to the fundamentals behind the industry and mining in general and Wall Street analysts. Considering that the market is already reacting positively to the company's recent results, investors can see how the future might be brighter than it seems for Albemarle.

Why Albemarle Could See Higher Prices Ahead

Starting with the fundamentals, lithium prices in the open market seem to be at a cyclical low since the demand for electric vehicles has declined in recent months. However, recent manufacturing PMI data has shown investors that the mining industry might be on the verge of a turnaround.

With expansion readings, investors might be leaning toward looking into the Materials Select Sector SPDR Fund NYSEARCA: XLB companies like gold or silver. But, when it comes to lithium, there’s a specific tailwind blowing behind this chemical metal for the coming quarters, an international one with no end in sight.

Both the United States and China have been leading the way in increasing the share of electric vehicles operating within their cities. With this in mind, investors can point to the fact that over two-thirds of Albemarle’s sales come from China and that this segment is set to grow massively in the coming months.

More than that, the company’s earnings presentation notes that up to 25% growth in electric vehicle demand was reported in China, which accounts for over 60% of global demand. Being exposed to this growth and tailwind, Albemarle is very well positioned to continue into a stronger rest of 2025.

Now, despite missing revenue and earnings expectations, management is still expecting (forecasting, really) a breakeven level of free cash flow in the business and improvements in conversions from revenue to operating income. Plainly said, management is confident that Albemarle can still perform relatively well despite a tough operating environment for lithium.

The Market’s Take on Albemarle Stock

With all of these factors in mind, investors can see that Wall Street analysts and other market players remain optimistic about Albemarle's future. Starting with the broader Wall Street view, a recent $140 per share valuation from BMO Capital Markets would call for a net upside of as much as 82.8% from today’s price.

Because it already trades at a low level of 54% of its 52-week high, the stock offers a fantastic risk-to-reward ratio for investors to consider today moving forward, with double-digit upside and a seemingly strong support level as of where it trades today.

More than that, some willing buyers showed up for the company near its lows recently, such as those from the Vanguard Group, who decided to boost their holdings in Albemarle stock by 2.5% as of February 2025, bringing their net holdings up to $1.26 billion today, or 12.5% ownership in the company.

These bullish valuations are not the only way analysts are willing to express their bullishness for Albemarle stock today. They are also forecasting up to $2.18 in earnings per share (EPS), a massive swing from today’s net loss of $1.09 per share, reflecting the future potential state and demand of the lithium market and mining industry.

Ultimately, there is one last factor investors can take into consideration: the valuation discounts. At 0.9x on a price-to-book (P/B), this represents a steep discount to peers like Sociedad Quimica y Minera de Chile NYSE: SQM, which is valued at 2.4x today.

All told, Albemarle stock could represent an attractive setup with fundamental tailwinds ready to push it higher by double-digits while only keeping the downside capped to a minimum.