Albemarle Earnings: We Expect Improved Results in the Rest of Year Following Cyclically Low Profits

Albemarle's first-quarter results reflected cyclically low lithium prices combined with temporarily high unit production costs. As a result, adjusted EBITDA fell 83% versus the prior-year quarter. Our views for lithium prices to rise in 2024 along with our confidence in Albemarle's ability to reduce its unit production costs throughout the year are unchanged. Having updated our model to incorporate Albemarle's first-quarter results, we maintain our $275 fair value estimate. Our narrow moat rating is also unchanged.