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Strategies & Market Trends : The New Economy and its Winners

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From: Bill Harmond	11/15/2017 11:16:10 AM
	of 57684

Deutsche Bank: Albemarle (ALB): Downgrade to Hold, Lithium Prices Poised to Move Lower in 2019E, Valuation Full. We are downgrading Albemarle to Hold from Buy as 1) DB’s recent Lithium Field Trip to China increased our confidence and visibility that due to strong lithium price increases over the past 2 years, new processing capacity is coming & by 2019E should begin to pressure lithium prices & 2) valuation is full, in our view. To justify >~10% upside, one would have to pay 23x 2020E Lithium EBITDA. While we believe Albemarle has one of the best lithium resources in the world & can grow its Lithium EBITDA at a 20% CAGR over the next 3 years, we believe this robust growth story, following a tripling of its shares over the past 21 months, will likely perform in-line over the next 6-12 months. We downgrade to Sell with a $150 PT (David Begleiter)

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