Yahoo Finance Analysts Are Betting On Albemarle Corporation (NYSE:ALB) With A Big Upgrade This Week
Albemarle Corporation (NYSE:ALB) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. Albemarle has also found favour with investors, with the stock up a notable 13% to US$271 over the past week. Could this upgrade be enough to drive the stock even higher?
After this upgrade, Albemarle's 21 analysts are now forecasting revenues of US$11b in 2023. This would be a substantial 99% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 135% to US$31.13. Before this latest update, the analysts had been forecasting revenues of US$10b and earnings per share (EPS) of US$29.68 in 2023. Sentiment certainly seems to have improved in recent times, with a substantial gain in revenue and a small lift in earnings per share estimates.
View our latest analysis for Albemarle
Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$311, suggesting that the forecast performance does not have a long term impact on the company's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Albemarle at US$497 per share, while the most bearish prices it at US$155. With such a wide range in price targets, the analysts are almost certainly betting on widely diverse outcomes for the underlying business. 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.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Albemarle's growth to accelerate, with the forecast 73% annualised growth to the end of 2023 ranking favourably alongside historical growth of 5.8% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 3.2% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Albemarle to grow faster than the wider 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 next year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Seeing the dramatic upgrade to next year's forecasts, it might be time to take another look at Albemarle.
These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 2 potential concern with Albemarle, including recent substantial insider selling. For more information, you can click through to our platform to learn more about this and the 1 other concern we've identified .
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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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.
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