Why Albemarle Stock Surged More Than 20% in February

Shares of (NYSE: ALB), the world's largest lithium producer, rose by an impressive 20.1% in February, according to data provided by S&P Global Market Intelligence. That rise was powered by a combination of its fourth-quarter earnings report (which it released on Valentine's Day), an uptick in the price of lithium, and the earnings report and commentary of the world's second-largest lithium producer, Sociedad Quimica y Miera de Chile (NYSE: SQM), aka SQM.

There's very little lithium producers can do about falling prices in the near term, and Albemarle's sales declined by 10.1% year over year in Q4 on the back of a significantly weaker price of lithium. That particularly hit home because Albemarle's core energy storage sales volume actually rose 35% year over year in the quarter. Underlying demand for lithium is still strong, driven by the demand for electric vehicle (EV) batteries.

However, a near 80% slump in the price of lithium over 2023 means that in 2024 Albemarle is on track for a significant slump in its revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). On average, Wall Street analysts are forecasting a 38.5% decline in Albemarle's sales this year, and some analysts recently downgraded the stock.

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Source Fool.com