Baird upgrades Albemarle on strong lithium pricing

Investing.com -- Baird upgraded Albemarle to Outperform given a sharp rebound in lithium prices. There is strong demand from stationary energy storage that should boost company earnings even after 2026.

The battery-grade lithium carbonate prices have climbed to nearly $16 per kg from about $11 a month ago on demand tied to energy storage and supply rationalisation in China.



Prices above $15 per kg is a level Baird sees as meaningfully supportive for Albemarle given its operating leverage to lithium pricing, particularly after recent cost cuts.

Baird said it does not expect a near-term slowdown in storage demand and revised its revenue and EBITDA forecasts higher for 2026 and beyond.

It lifted its price target on Albemarle to $210 from $113, saying the valuation still has room to run despite the stock rising 24% over the past month, compared with a 1% gain in the S&P 500.

Albemarle is trading nearly eight turns below peers on a 2026 EV to EBITDA basis.

Baird’s base case applies a roughly 22x multiple to estimated 2027 EBITDA of $1.39 billion, compared with a peer average near 17x. In an upside case, Baird said EBITDA could reach as much as $1.8 billion if lithium prices continue to rise, which would support significantly higher valuation.

Though the recent lithium price strength may partly reflect pre-Lunar New Year buying in China.

The brokerage expects Albemarle to provide 2026 guidance using multiple lithium price scenarios, consistent with prior years. It noted that a $12 to $15 per kg pricing scenario has previously implied $1 billion to $1.5 billion of EBITDA, underpinning its more bullish outlook.

"We are incrementally positive given the recent increase in lithium prices (now over $15/kg) and our view that demand strength stemming from stationary storage will continue to propel ALB higher," said analyst.

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