Analysts Just Made A Huge Upgrade To Their Albemarle Corporation (NYSE:ALB) Forecasts
Albemarle Corporation (NYSE:ALB) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. Investors have been pretty optimistic on Albemarle too, with the stock up 16% to US$222 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.
After this upgrade, Albemarle's 19 analysts are now forecasting revenues of US$5.2b in 2022. This would be a huge 43% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 289% to US$9.35. Before this latest update, the analysts had been forecasting revenues of US$4.4b and earnings per share (EPS) of US$6.16 in 2022. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.
View our latest analysis for Albemarle
With these upgrades, we're not surprised to see that the analysts have lifted their price target 8.3% to US$268 per share. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Albemarle at US$368 per share, while the most bearish prices it at US$80.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Albemarle's rate of growth is expected to accelerate meaningfully, with the forecast 61% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 2.8% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.9% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Albemarle is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Albemarle could be worth investigating further.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Albemarle going out to 2024, and you can see them free on our platform here..
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
