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Albemarle Corp. (ALB) shares took a hit Tuesday after JPMorgan crunched the numbers on lithium and didn't like what it saw. The bank trimmed its earnings estimates and price target for the lithium producer, sending the stock down more than 5%.
Analyst Jeffrey Zekauskas kept a Neutral rating but lowered the December 2027 price forecast to $140 from a previous December 2026 target of $160. That's a meaningful cut, and it reflects a simple reality: lithium prices are softening.
JPMorgan now expects 2026 adjusted EBITDA of $2.88 billion, down 14.4% from its prior $3.37 billion estimate. For 2027, the bank cut its forecast by 18.4% to $2.93 billion from $3.59 billion. Adjusted earnings estimates also fell: 2026 is now seen at $12.05 per share, down from $14.20, and 2027 drops to $11.65 from $15.35.
The culprit is weaker lithium prices. China lithium carbonate prices averaged $24,810 per metric ton in the second quarter, but so far in the third quarter they've averaged about $21,625. JPMorgan now expects prices to stay in the low-$20-per-kilogram range, down from its previous mid-$20 assumption. For Albemarle, every $1-per-kilogram change swings annual EBITDA by roughly $250 million, so this is no small adjustment.
Looking ahead, JPMorgan sees third-quarter adjusted EBITDA of $668 million. That's a step down from $858 million in the second quarter, though still well above the $226 million from a year ago. The bank also expects lower quarterly lithium sales volume and a weaker product mix.
Adding to the pressure, Albemarle is dealing with delays at the Greenbushes CGP3 plant after a fire in June. The plant restarted Aug. 1, but JPMorgan now expects full production rates only by the end of the first quarter of 2027. That's a longer timeline than previously hoped.
Despite the headwinds, the bank notes Albemarle trades near its price forecast and carries a fair valuation for a high-quality but volatile lithium producer. In other words, the market has already priced in a lot of the bad news.
Albemarle shares were down 5.16% at $134.21 at the time of publication on Tuesday, according to market data.
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