Albemarle started at Buy, SQM at Neutral by Rothschild Redburn in cyclical lithium opportunity

[Lithium abstract concept]
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Leading lithium producers Albemarle (NYSE:ALB [https://seekingalpha.com/symbol/ALB]) and SQM (NYSE:SQM [https://seekingalpha.com/symbol/SQM]) were initiated at Rothschild & Co. Redburn on Friday, with Albemarle meriting a Buy recommendation and $135 price target while Sociedad Quimica y Minera de Chile (NYSE:SQM [https://seekingalpha.com/symbol/SQM]) was rated Neutral with a $54 PT, with the brokerage believing the lithium market is at the cusp of another price upswing, the trough of which was observed in Q2 2025.

Analysts Mazahir Mammadli and Tony Jones said they are bullish on the earnings growth potential for both companies given its upbeat market outlook, its top pick is Albemarle (NYSE:ALB [https://seekingalpha.com/symbol/ALB]), considering the specifics of their asset bases, pointing to Albemarle's greater exposure to spodumene than SQM (NYSE:SQM [https://seekingalpha.com/symbol/SQM]) and resulting higher earnings growth potential, and the difference in exposure to high royalty regimes.

Buy-rated Albemarle (NYSE:ALB [https://seekingalpha.com/symbol/ALB]) is well positioned to reap the rewards from rising lithium prices, Mammadli and Jones said, and its bullish stance on spodumene prices means the lithium price uplift will bypass the converters and accrue to spodumene assets, with Albemarle's spodumene exposure becoming the main driver of its faster earnings growth.

Additionally, since the Atacama brine facility is a smaller proportion of Albemarle’s (ALB [https://seekingalpha.com/symbol/ALB]) asset base, the company’s exposure to high Chilean royalties is limited, thus the analysts expect a better margin accretion from the lithium price uplift, meriting its Buy recommendation.

Mammadli and Jones said the brokerage's bullish outlook on lithium also translates to healthy earnings growth estimates for SQM (SQM [https://seekingalpha.com/symbol/SQM]), but as Salar de Atacama is a large portion of SQM’s asset base, the company has a higher exposure to Chilean lithium royalties, truncating the earnings uplift from higher lithium prices through 2060.

Also, spodumene's small part of SQM's (SQM [https://seekingalpha.com/symbol/SQM]) portfolio limits exposure to the part of lithium market with faster price growth, the analysts said.

ETF: (LIT [https://seekingalpha.com/symbol/LIT]), (ILIT [https://seekingalpha.com/symbol/ILIT]), (BATT [https://seekingalpha.com/symbol/BATT])

MORE ON ALBEMARLE AND SOCIEDAD QUIMICA Y MINERA DE CHILE

* Albemarle: Anti-China Critical Mineral Play [https://seekingalpha.com/article/4829919-albemarle-anti-china-critical-mineral-play]
* Albemarle: Trading Around Book Value, Starting To Look Cheap [https://seekingalpha.com/article/4829774-albemarle-trading-around-book-value-starting-to-look-cheap]
* Sociedad Química y Minera de Chile: Strong Bet On Lithium Recovery With A Multi-Commodity Edge [https://seekingalpha.com/article/4832007-sociedad-qumica-y-minera-de-chile-strong-bet-on-lithium-recovery-with-a-multi-commodity-edge]