Albemarle Corporation (NYSE:ALB) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline. The market may be pricing in some blue sky too, with the share price gaining 18% to US$282 in the last 7 days. Could this upgrade be enough to drive the stock even higher?
Following the upgrade, the latest consensus from Albemarle's 19 analysts is for revenues of US$7.5b in 2022, which would reflect a huge 73% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$6.2b in 2022. It looks like there's been a clear increase in optimism around Albemarle, given the sizeable gain to revenue forecasts.
Additionally, the consensus price target for Albemarle increased 5.9% to US$296, showing a clear increase in optimism from the analysts involved. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Albemarle analyst has a price target of US$440 per share, while the most pessimistic values it at US$145. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Albemarle's growth to accelerate, with the forecast 200% annualised growth to the end of 2022 ranking favourably alongside historical growth of 3.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 2.6% annually. 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 highlight for us was that analysts increased their revenue forecasts for Albemarle this year. The analysts also expect revenues to grow faster than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Albemarle.
Still got questions? We have analyst estimates for Albemarle going out to 2024, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks 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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