Albemarle upgraded to Buy as lithium prices recover, boosting earnings outlook and cash flow potential.

Albemarle has been upgraded to a Buy rating due to the rising strategic importance of lithium and recovering lithium carbonate equivalent (LCE) prices. The company’s proactive cost controls, capital expenditure cuts, and asset sales have strengthened its balance sheet and positioned it for strong free cash flow as prices stabilize around $18–20/kg. Analysts expect EBITDA margins to exceed 50% and free cash flow to surpass $1.5 billion despite some joint venture accounting complexities. The current valuation at 15 times price-to-earnings reflects normalized LCE prices, but Albemarle’s low-cost, strategic position in the global energy transition justifies a premium valuation.