The stock price of Albemarle, a chemicals company that is also one of the world’s largest producers of lithium, a key raw material for electric vehicle batteries, has seen its stock decline by about 10% over the last month (21 trading days). This compares to the S&P 500 which remains down by about 11% over the same period. Now Albemarle’s business has actually been doing well recently. Lithium prices have soared, with spot prices for lithium carbonate surging by almost 70% year-to-date, and by roughly 4x over the past year, driven by strong demand for EVs. The company has also projected windfall profits for this year, guiding adjusted earnings of between $9.25 and $12.25 per share for this year, up from just $4 last year. However, concerns about the macroeconomic outlook appear to be weighing the stock down a bit. With U.S. inflation surging, the Federal Reserve has embarked on a more aggressive path for rate hikes, which is, in turn, expected to impact U.S. GDP growth. The recent decline comes amid concerns of an impending U.S. recession which could also impact lithium prices.
However, now that ALB stock has seen a decline of about 11% over the last month, will it continue its downward trajectory in the near term, or is a rally imminent? Going by historical performance, there is a 63% chance of a rise in ALB stock over the next month. Out of 272 instances in the last ten years that ALB stock saw a twenty-one-day decline of 10% or more, 170 of them resulted in ALB stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 170 out of 272, or about 63% chance of a rise in ALB stock over the coming month, implying a positive near-term outlook for the stock. See our analysis on Albemarle Stock Chance of A Rise for more details.
While ALB stock has declined recently, several peers in its sector still look like a better bet than Albemarle. Check out how Albemarle Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.
Calculation of ’Event Probability’ and ’Chance of Rise’ using last ten years data
- After moving -10% or more over five days, the stock rose in the next five days on 58% of the occasions.
- After moving -15% or more over ten days, the stock rose in the next ten days on 47% of the occasions
- After moving -10% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 63% of the occasions.
This pattern suggests that ALB stock could see some gains in the near-term.
Stock prices have fallen precipitously across sectors over recent months and we are now in a bear market for the first time since March 2020, when the Covid-19 outbreak triggered a market crash. We capture key trends in the Dow during and after major market crashes in our interactive dashboard analysis, ‘Market Crashes Compared.’
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