ALB rose 3.5% overnight, finally offering some hope for the world’s largest lithium (Li) producer, which has struggled over the last few years as the Li price plummeted. ALB posted a healthy 4Q earnings beat despite lower sequential volumes and in-line pricing, with productivity improvements the driver. ALB reduced anticipated full-year 2025 capital expenditures by $100 million; they’re now targeting capital expenditures in the range of $700 and $800 million, or down more than 50% year-over-year. Notably, the company also announced it could generate breakeven free cash flow in 2025 without lithium prices rising
- Q4 revenue of $US1.231 billion
- Adjusted Earnings (Ebitda) of $US250.7 million, ahead of expectations for $US180.4 million.
Looking ahead, ALB forecast FY25 revenue of $4.9 billion to $5.2 billion, slightly below consensus, but with Li’s volatile nature, it could quickly become too optimistic or pessimistic. At one point last night, the stock was up over 8%, but caution prevailed as traders reminded themselves of the issues surrounding the excess supply of Li. Altogether, the update cleared what had become downtrodden market expectations.
- We believe the Li space is looking for a low, which could push ALB back to $US100 – MM is long ALB in our International Equities Portfolio.
