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Insights into Albemarle's Strong 3Q17 Returns

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Part 6
Insights into Albemarle's Strong 3Q17 Returns PART 6 OF 6

Wall Street’s View on Albemarle after 3Q17 Earnings Release

Analysts’ consensus

After Albemarle (ALB) posted its 3Q17 earnings, 20 analysts have been actively tracking the stock. About 45% of them have recommended a “buy” for the stock, and 55% have recommended a “hold.” None of them have recommended a “sell.”

Wall Street&#8217;s View on Albemarle after 3Q17 Earnings Release

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The analyst consensus for Albemarle indicates a 12-month target price of $136.79. However, the stock is already trading 3% above that recommended target price.

Analysts say ‘hold’

ALB posted better-than-expected 3Q17 earnings and raised its adjusted EPS (earnings per share) for 2017. A new technology to extract lithium is expected to increase production capacity nearly 50% by 2020. ALB has requested the Chilean Economic Development Agency to increase the quota. The capacity expansion plan in the Greenbushes facility and the acquisition of lithium assets in Asia are also expected to drive future growth. As a result, many analysts are recommending a “hold” for the stock.

Individual brokerage firms’ recommendations

  • UBS (UBS) has recommended a target price of $150 for Albemarle, implying a return potential of 6.5% from its closing price of $140.84 as of November 9, 2017.
  • BMO has rated Albemarle an “outperform” and recommended a target price of $160, which implies a return potential of 13.6% from its closing price of $140.84 as of November 9, 2017.
  • Oppenheimer has raised its target price for Albemarle to $157, implying a return potential of 11.5% from its closing price of $140.84 as of November 9, 2017.

Investors looking to invest in ALB indirectly can invest in the VanEck Vectors Generic Drugs ETF (GNRX), which has invested 3.1% of its portfolio in Albemarle. The other holdings of the fund include Teva Pharmaceutical (TEVA) and Mylan (MYL) with weights of 10.3% and 6%, respectively, as of November 9, 2017.

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