Albemarle (ALB.N): Underappreciated Growth Opportunities Ahead; Upgrade to Buy

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Albemarle (ALB.N): Underappreciated Growth Opportunities Ahead; Upgrade to Buy

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18 Jun 2026 04:00:00 ET │ 19 pages

Albemarle (ALB.N)

Underappreciated Growth Opportunities Ahead; Upgrade to Buy

CITI'S TAKE

Ahead of 2Q26 earnings, we update our estimates to reflect lithium market

pricing and Citi’s lithium forecast. While supply risk on the potential of re-

starts in Western Australia or Jianxiawo has weighed on spot & equity Buy / High Risk ↑ from Neutral / High Risk

prices, we are skeptical that the market will flip to a meaningful glut given Price (16 Jun 26 16:00) US$166.11

current demand tailwinds. Even in a balanced market, we see ALB as one of

Target price US$225.00the primary beneficiaries of structural lithium demand tailwinds given its

high-quality assets, conversion network, and potential to allocate a steady Expected share price return 35.5%

capital program to high-return growth projects. Recent share price Expected dividend yield 1.0%

weakness is due to continued pullback in spot prices since mid-May, which

Expected total return 36.4%should be largely transitory given robust battery production and resilient

NEV battery demand. We believe current valuation levels underappreciate Market Cap US$19,590M

ALB’s next leg of growth and upgrade to Buy with no change to our $225 TP.

Structural Demand Pull from ESS — Citi expects strong growth in battery energy

storage system (BESS) output, projecting ~35% Y/Y growth to 950 GWh this year Price Performance

and another ~37% increase to around 1,300 GWh in 2027, driven by renewable (RIC: ALB.N, BB: ALB US)

energy mandates and rising data center investments. Despite higher lithium costs,

1Q26 battery margins have remained stable, with further improved profitability

expected across the supply chain in FY26.