Albemarle cut to Neutral at BofA as headline-driven momentum limits upside

[Lithium abstract concept]
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Albemarle (NYSE:ALB [https://seekingalpha.com/symbol/ALB]) +0.8% in Tuesday's trading despite receiving a downgrade to Neutral from Buy with a $100 price target at Bank of America, which said shares are fairly valued following recent strength on the back of a U.S. government investment in Thacker Pass and export restriction headlines on Chinese lithium batteries, news that investors have "misread" as positive for ALB.

BofA analysts led by Rock Hoffman believe retail investors are wrongly equating Lithium Americas' deal renegotiation with MP Materials' Thacker Pass deal, and China’s recent export control announcement likely lifted lithium equities as some confused a "lithium batteries" export ban with one on lithium chemicals - the latter could improve the structural balance of global lithium, but the former has no direct impact on lithium equities.

Hoffman and his team said lithium pricing has troughed, and market fundamentals can improve over the next few quarters, which could allow Albemarle (NYSE:ALB [https://seekingalpha.com/symbol/ALB]) to return to a period of stronger earnings., but recent equity momentum has been headline-driven and rather than structurally-driven, which BofA believes is less durable and also limiting further upside.

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