Here's Why Shares in Albemarle Slumped in June
Shares in lithium miner (NYSE: ALB) declined by 22.1% in June, according to data provided by S&P Global Market Intelligence. The move comes from a price decline in lithium carbonate and a deteriorating narrative around the electric vehicle (EV) market. The first issue is an immediate reaction to falling revenue and profitability at Albemarle, and the second issue is investors pricing in less favorable future outcomes for the company's profitability.
The demand driver for lithium is its use in transportation and energy storage batteries. EVs are the more significant part of that demand, so if you are optimistic about the future for EVs, then you are almost certainly confident about the future demand for lithium. That's why investors often consider Albemarle a proxy for sentiment over EVs.
Unfortunately, the narrative around EVs has deteriorated in 2024, as ongoing relatively high interest rates have made it more expensive to purchase a car. In addition, there's almost a negative cycle whereby declining investment in EVs is slowing the rate at which automakers can reduce cost per vehicle and ultimately make it easier for consumers to buy EVs. That will hurt demand, too.
Source Fool.com
Albemarle Corp Stock
The stock is one of the favorites of our community with 28 Buy predictions and 4 Sell predictions.
As a result the target price of 168 € shows a very positive potential of 85.14% compared to the current price of 90.74 € for Albemarle Corp.
