Albemarle Has Risen 59% Year-to-Date: Can It Continue?



Albemarle’s stock performance

In 2017, Albemarle (ALB) stock has risen 59% on a year-to-date basis, outperforming the broad-based SPDR S&P 500 ETF (SPY), which has risen 17.6%. ALB’s peers Sociedad Química y Minera de Chile (SQM) and FMC (FMC) outperformed ALB, rising 90.2% and 67.1%, respectively. W.R. Grace (GRA), however, underperformed ALB with a return of 10.2% for the same period.

Albemarle’s strong performance is driven by three quarters of strong reported earnings that beat analysts’ estimates. ALB also raised its guidance for fiscal 2017 adjusted EPS (earnings per share) to $4.40–$4.50. The earlier guidance was $4.20–$4.40. Positive business developments such as a reduction in long-term debt are expected to bring down its interest expense and improve efficiency.

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ALB also plans to improve its production capacity at the Greenbushes facility. It has purchased lithium salts production assets in Asia and innovated a new lithium extraction technology that could improve its existing extraction rates. ALB is preparing to meet the growing demand for lithium and could be a major player. It’s expected to continue to grow unless the demand for lithium slows down.

Moving averages and RSI

Albemarle stock is trading 7.4% above its 100-day moving average of $127.40, which indicates an upward trend in the stock. Its RSI (relative strength index) of 49 indicates that the stock is neither oversold nor overbought.


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