Albemarle (ALB) Stock Forecast & Price Target

Albemarle's positive outlook is significantly supported by the robust growth in electric vehicle (EV) sales, which rose 30% year-over-year and 8% month-over-month in June, reflecting a strong demand for lithium, a critical component in battery production. Furthermore, during the first half of 2025, EV sales in Europe increased by 22% year-over-year, with particular momentum seen from major automakers such as the Volkswagen Group, which reported a remarkable 90% year-over-year growth in EV sales. As a fully integrated lithium producer with extensive upstream resources and refining capabilities across multiple regions, Albemarle is well-positioned to capitalize on the increasing demand for lithium in the expanding electric vehicle market.

Albemarle's outlook appears negative due to a decrease in long-term agreements (LTAs) for lithium volumes, with management indicating that only around 45% of FY25 volumes are expected to be sold under these contracts, reflecting a reliance on less stable sales in the Chinese market. Additionally, the slowing growth in electric vehicle (EV) sales in China, with year-to-date sales projected to decline to 30%, alongside a 9% month-over-month contraction in July, suggests weakening demand for lithium as EV inventories remain elevated. Furthermore, the potential decline in spodumene feedstock prices, which are linked to the spot price dynamics in China, could further impact Albemarle's profit margins in the upcoming quarters.