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Time For A Reality Check: Albemarle Corporation (ALB)

Albemarle Corporation (NYSE: ALB), a mining business, had its stock rise this week after the company raised its full-year expectations. The lithium market continues to be favorable, and we are most certainly not only talking about 2022.

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Albemarle’s projection has improved as a result of the new lithium supply talks. Albemarle Corporation (ALB) now forecasts $5.8-$6.2 billion in yearly revenues, up from $4.2-$4.5 billion in February. In comparison, sales in 2021 were $3.33 billion. This will boost adjusted earnings by 204 to 271 percent to $12.3 to $15 per share.

The key reason is a 140 percent increase in lithium’s average selling price between now and 2021. Albemarle Corporation (ALB) can raise exports by 20-30% due to the opening of new manufacturing facilities at the same time.

Obviously, investors were pleased with the 140 percent increase in yearly revenue growth predictions, even though the message about a healthy lithium market was not surprising. The need for lithium is growing in tandem with the development of batteries for electric cars, household energy storage, and industrial energy storage.

Strong demand and growing lithium prices are no assurance that Albemarle’s stock will rise, and it may face bear market pressure.

ALB is also one of the world’s major producers of lithium, bromine, and catalysts. The corporation is able to influence the pricing during supply negotiations as a result of this. Albemarle’s effect may be seen in the increase in the yearly prediction following such discussions.

It’s worth noting that the price of lithium reached an all-time high in 2022, more than quadrupling in a single year. Despite its rapid rise, the price of lithium is not likely to drop much until mid-2023, owing to the sustained high demand for this raw element.

In the last month, Albemarle Corporation (ALB) stock has gained 22.52%, 33.60 percent in the last three months, and -14.32% in the last six months. ALB had price volatility of 4.77 percent in the last week and 5.74% in the previous month.

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