Lithium provider Albemarle is a top pick on the back of growing electric vehicle demand, Citi says. Analyst Patrick Cunningham launched coverage of a group chemicals stocks, saying Albemarle is a buy because of its long-term potential. “We think the timing is right to buy ALB, maintaining our long-term bullish view and seeing a positive risk/reward setup with EV battery supply chain restock a potential near-term catalyst for lithium prices,” Cunningham wrote Tuesday. ALB 1D mountain Albemarle shares 1-day Albemarle shares are only up 5.5% in 2023, lagging the S & P 500, which is higher by more than 13%. Regardless, the analyst’s $260 price target implies 13% upside from Tuesday’s closing price for the stock, at $228.85. Shares rose slightly in the premarket. The analyst’s bullish view on Albemarle is based on lithium prices, which are starting to rebound from lows at the start of the year. As Cunningham expects lithium production will continue to lag fast-growing demand for electric vehicles, now is the time for investors to snap up shares of Albemarle, he said. “We believe EV demand should remain strong this year and restocking in the supply chain could be the next catalyst for price action. We think upward price momentum points to 4% upside beyond the top end of segment FY23 guide,” Cunningham said. “With shares down more than 30% from the Nov-22 peak, we estimate nearly 20% upside potential in our base case, even assuming 2024E double-digit realized price declines,” he added. —CNBC’s Michael Bloom contributed to this report.
