Albemarle Corporation (ALB): A Bull Case Theory

We came across a bullish thesis on Albemarle Corporation on The Musings of Ozz’s Substack by Christopher De Ozz. In this article, we will summarize the bulls’ thesis on ALB. Albemarle Corporation's share was trading at $74.77 as of July 28^th. ALB’s trailing and forward P/E were 35.46 and 18.45, respectively according to Yahoo Finance.

Albemarle Corporation (ALB), the world’s largest publicly traded lithium producer, has transformed through strategic acquisitions and divestments, most notably the $6.2 billion Rockwood purchase that cemented its lithium dominance. Its vertically integrated operations span mining in Chile, Australia, and the U.S., with refining in Chile, Australia, China, and a planned South Carolina site, offering cost leadership through Chilean brine operations at < $7,000/ton LCE.

Lithium remains the core growth driver, supported by EV and grid storage demand, projected to double by 2030. Bromine specialties and refining catalysts provide diversification, generating stable cash flow. Recent lithium price volatility—from 2022’s $55,000–$80,000/ton highs to ~ $8,000/ton—has pressured earnings, leaving Albemarle trading at depressed multiples despite structural advantages.

Tailwinds include vertical integration, cost leadership, and policy incentives like U.S. Section 45X credits; however, headwinds persist in the form of policy rollbacks, overcapacity, and geopolitical or environmental risks. Albemarle’s $9 billion market cap and $13.5 billion EV reflect both its industry leadership and cyclicality. Management continues to develop U.S. projects, including Kings Mountain and a South Carolina refinery, though timelines may flex with price dynamics.

Free cash flow remains resilient with capex of $350–500 million per quarter, supporting a stable dividend. The upcoming July 30 earnings report is expected to show negative EPS on flat revenue, underlining market caution. For investors, Albemarle offers significant long-term upside tied to lithium’s structural demand growth and policy support, but near-term performance hinges on price recovery, operational discipline, and regulatory stability, presenting a compelling yet timing-sensitive opportunity.

Previously, we covered a bullish thesis on Eastman Chemical Company (EMN) by Necessary-Damage5658 in November 2024, which highlighted its ability to gain market share from export control changes favoring compliant chemical suppliers. The company’s stock price has depreciated about 24% since our coverage, as the thesis didn’t play out due to market headwinds. The thesis still stands on regulatory-driven tailwinds. Christopher De Ozz shares a similar view but emphasizes Albemarle’s lithium leadership and EV-driven growth.

Albemarle Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held ALB at the end of the first quarter which was 36 in the previous quarter. While we acknowledge the potential of ALB as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.