Summary
- Albemarle has surged to pre-pandemic levels over the past few months.
- Albemarle is being bolstered by the recent success of EVs.
- While Albemarle's long-term prospects remain strong, the company is facing a growing number of near-term challenges.
Albemarle (NYSE:ALB) has recovered significantly over the past few months. The company is riding a wave of positive news from the EV (electric vehicle) industry. The recent success of Tesla (NASDAQ:TSLA), in particular, is adding a great deal of momentum to the lithium industry. As one of the world's largest lithium companies in the world, Albemarle is set to be a primary beneficiary of EV's success.
Albemarle experienced a somewhat mixed Q1, reporting a solid adjusted EBITDA of $196.4 million but an underwhelming revenue of $739 million. The pandemic likely played a large role in slowing down Albemarle's momentum in recent quarters. While Albemarle will continue to face coronavirus-related disruptions over the next few quarters, the company is well-positioned in the long term.
Albemarle has been positively impacted by Tesla's recent success. The company is surging despite coronavirus-related headwinds.
Data by YChartsSource: YCharts
Long-Term Prospects Remain Strong
The coronavirus is undoubtedly taking its toll on Albemarle. All of the company's major businesses have felt the impact of COVID-19 in recent quarters. The company's catalyst business, for instance, was impacted by low transportation fuel demand caused by the coronavirus. Albemarle's 11% Y/Y revenue decline was a large part attributed to such coronavirus-related demand issues.
COVID-19 issues, workforce disruptions, and general delays will likely continue to impact Albemarle for the foreseeable future. Despite these large near-term challenges, Albemarle's long-term prospects remain strong. Long-term lithium demand is likely to be driven by EVs. This is great news for Albemarle, considering the fact that the EV industry has never looked more promising. In fact, BCG even forecasts that EVs will account for a third of the auto industry by 2025 and overtake ICEs by 2030.
