Albemarle (ALB) Stock Forecast & Price Target

Albemarle's positive outlook is supported by the robust growth in electric vehicle (EV) sales worldwide, which saw a significant year-over-year increase of 30% in June, contributing to a 22% rise in sales in Europe during the first half of 2025. The acceleration of EV demand in major markets, particularly in China and Europe where sales grew by 33% and 26% respectively, indicates a strong market for lithium as an essential component in battery production. Furthermore, the Volkswagen Group’s remarkable 90% increase in EV sales in Europe highlights the escalating reliance on lithium, reinforcing Albemarle's strategic advantage as a fully integrated lithium producer with diverse upstream resources and global refining capabilities.

Albemarle's outlook has been negatively impacted by a significant reduction in the expected long-term agreements (LTAs) for lithium sales, with approximately 45% of FY25 volumes now anticipated to be sold under LTAs, down from prior forecasts. The company is also facing a slowdown in electric vehicle (EV) sales growth in China, reflected in a year-over-year growth rate dropping to 15% and year-to-date sales potentially declining to 30%, compared to 33% in the first half of FY25. Additionally, the continued premium pricing of lithium outside China, coupled with indications of declining spodumene feedstock prices, raises concerns about future revenue pressures amid an oversupply situation characterized by elevated EV inventories.