The company is positioning itself for a long-awaited recovery in the lithium market.
Shares in lithium and bromine materials company Albemarle (ALB +8.47%) soared by 32.3% in November, according to data provided by S&P Global Market Intelligence. Such a violent move doesn’t usually occur without a few things going right for the company, and that’s certainly the case with Albemarle in November. Let’s take a closer look at why the stock came into favor last month.
Albemarle delights the market.
The stock received a slew of analyst upgrades over the last month, driven by three interrelated factors.
- The company’s third-quarter earnings exceeded market expectations, demonstrating resilience amid a weak lithium price environment in the first nine months of 2025.
- Management’s cost-cutting actions and divestitures are encouraging investors to price in future profitability improvements.
- A combination of recent improvements in lithium pricing and improved demand for lithium for energy storage is raising hopes that it can offset any weakness in demand from electric vehicle batteries.
Today’s Change
(8.47%) $10.09
Current Price
$129.23
Key Data Points
Market Cap
$14B
Day’s Range
$122.83 – $129.84
52wk Range
$49.43 – $132.90
Volume
73K
Avg Vol
3.8M
Gross Margin
12.27%
Dividend Yield
1.36%
Third quarter earnings
Unfortunately, the weakness in lithium market prices (the average lithium market price was $9 per kg in the first half of 2025, compared to a range of $12 per kg to $15 kg per kg in the same period of 2024) means that Albemarle reported a net loss of $202 million in the third quarter and a $222 million loss for the first nine months.
However, management isn’t standing still, and a combination of cost cuts and productivity measures means Albemarle is heading toward $450 million in run rate cost cuts in 2025, compared to its initial target $300 million to $400 million. These improvements encouraged management to forecast free cash flow (FCF) generation of $300 million to $400 million in 2025 – an excellent result under the circumstances.
Image source: Getty Images.
Improved balance sheet
In addition to the cost cuts and cash flow generation, management moved to improve its balance sheet by selling its 50% stake in Eurecat (catalyst services) and its and a 51% stake in Ketjen (refining catalyst solutions) for a combined total of $660 million.
An improving lithium market
Lithium prices improved recently (trading at above $10 per kg at the time of writing) due to a combination of strengthening EV-related demand from China and ongoing improvement in energy storage demand. In fact, Albemarle reported “better-than-expected Energy Storage volumes” in its recent third quarter. Moreover, supply growth slowdowns and inventory drawdowns have improved market fundamentals.
In the end, it’s classic cyclical market conditions, but with the added kicker that long-term demand for EVs and energy storage looks assured.
Image source: Getty Images.
Where next for Albemarle
All told, the operational improvements, cost cuts, and balance sheet improvements mean that Albemarle stands well-positioned for any potential improvement in lithium prices in 2026.
Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
