UBS analysts have upgraded Albemarle (NYSE:ALB) to Buy from Neutral, citing the 2023 reset as a good entry point for the best growth opportunity in chems. The analysts believe a lot of the risks are already priced into the stock and that the current inflection in China Lithium pricing and 2023 earnings reset will lead to increasingly positive sentiment on the stock. UBS estimates ALB is pricing in ~$20/kg lithium prices, which would be the high end of the cost curve, but not high enough to drive investments to close a potential 1 mil ton lithium supply gap by the end of the decade. Even in a scenario where Chile limits resource access, by 2030e ALB will likely have ~365K ton in resource capacity ex-Chile.
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