Deep Discount, Lithium Tailwinds, and 53% Upside

The commodities market has taken investors by surprise in the past few days, especially as the prices of gold and silver have surged, shaking up most beliefs about where money should be flowing. The sort of conclusions that can be drawn from this behavior are several, but one fact that stands out is that some stocks in the basic materials sector will likely have to play catch-up to these runs.

One of the standouts in the space is seen in shares of Albemarle Co. NYSE: ALB. While this mining company is more focused on the lithium side of things, the rise (and rise) of gold and silver will likely be a leading benchmark for other chemicals and metals to tag along in their momentum.

Knowing that the broader economic landscape might also play a role in creating demand for Albemarle’s products and offerings can also support a bullish thesis.

While this stock has failed to attract attention from the markets lately (in terms of price action), there are other gauges besides the chart that investors can consider today, especially those seeking ways to position their portfolios on the right side of this metals rally.

As it will become clear in just a minute, some Wall Street participants are already positioning themselves ahead of this curve.

Capital Warms Up to Albemarle’s Upside

Over the past quarter, up to $249 million worth of institutional capital has flowed into Albemarle stock, which may not be the largest historical inflow. Yet, it still represents a sizable investment considering the company’s $7 billion market capitalization.

Now, turning to price action, the stock trades at only 50% of its 52-week high, representing a deep state of bearish territory and creating a favorable risk-to-reward setup for those looking to buy into the company’s future. After all, this is everything institutional buyers look for. These asymmetric setups offer significant upside potential with minimal downside risk.

In terms of upside potential, investors can note that the stock’s current level is far from its former glory, while at the same time, it is relatively pricing in most (if not all) worst-case scenarios today, even in a world filled with uncertainty born from the recent trade tariffs implemented by President Trump.

There are those who still hold this view, as evidenced by the consensus price target of $ 91.60 per share set by Wall Street analysts today. In order to prove these valuations right, the stock would have to deliver on a rally as big as 53.1% from where it has fallen today.

That very view is one to reiterate the decisions made by these institutional buyers, seeing that there is not much room for Albemarle stock to move lower and plenty of potential for it to start heading into a new ceiling. However, investors still need to justify that view in today’s bearish climate.

ALB Stock: Bearish Price, Bullish Setup, Big Upside

The main driver in a stock’s price and valuation is the underlying earnings per share (EPS) growth potential, and in the case of Albemarle, it seems Wall Street analysts are all over a more optimistic forecast moving forward. Compared to today’s net loss of $0.18 per share, analysts forecast up to $2.97 in EPS for the third quarter of 2025.

This massive jump into profitability may be what investors need to see at the end of the day to propel the stock into the valuations that these analysts are pushing toward.

Furthermore, according to the company’s management and overall sentiment, lithium demand is expected to rise over the next few years, directly tied to electric vehicle (EV) demand and other economic factors.

Another benefit investors can expect from holding Albemarle through this waiting period, which will likely result in better EPS, is the commitment from management to reward those with enough patience to remain invested in the company. Currently, Albemarle offers a dividend payout of $1.62 per share.

At today’s low prices, this payout would translate into an annualized dividend yield of up to 2.7%. Now, this might not be the most exciting income potential in the market today. However, it still allows investors to slightly outpace inflation in exchange for a double-digit upside payoff by the time the stock recovers.

Solidifying the sort of upside that can be expected from Albemarle comes from its discount to book value, as the stock now trades at a price-to-book (P/B) valuation of as low as 0.88x. This current valuation offers a 12% discount from the book value and a low price relative to the 52-week high. This makes Albemarle a fantastic asymmetric investment to consider, especially during the ongoing metals rally.

Before you consider Albemarle, you’ll want to hear this.

MarketBeat keeps track of Wall Street’s top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on… and Albemarle wasn’t on the list.

While Albemarle currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Learn the basics of options trading and how to use them to boost returns and manage risk with this free report from MarketBeat. Click the link below to get your free copy.

Get This Free Report

Like this article? Share it with a colleague.

Link copied to clipboard.