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Earnings Estimates Moving Higher for Albemarle (ALB): Time to Buy?

Zacks Equity Research
·2-min read

Investors might want to bet on Albemarle (ALB), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.

Analysts' growing optimism on the earnings prospects of this specialty chemicals company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

Consensus earnings estimates for the next quarter and full year have moved considerably higher for Albemarle, as there has been strong agreement among the covering analysts in raising estimates.

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Current-Quarter Estimate Revisions

For the current quarter, the company is expected to earn $5.44 per share, which is a change of +418.1% from the year-ago reported number.

Over the last 30 days, the Zacks Consensus Estimate for Albemarle has increased 56.41% because three estimates have moved higher compared to no negative revisions.

Current-Year Estimate Revisions

For the full year, the company is expected to earn $18.52 per share, representing a year-over-year change of +358.42%.

The revisions trend for the current year also appears quite promising for Albemarle, with six estimates moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 48.01%.

Favorable Zacks Rank

Thanks to promising estimate revisions, Albemarle currently carries a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

Albemarle shares have added 22.5% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.


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Albemarle Corporation (ALB) : Free Stock Analysis Report
 
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Zacks Investment Research