Our $65 target price is based on a 2026E sum-of-the parts (SOTP) analysis. We apply ~10x EV/EBITDA multiple to Energy Storage, ~10x to Specialties, and ~8x to Ketjen, all of which are above comparable peer valuations and reflect cyclical multiple logic on our lower estimates.

We see the following risks to the stock achieving our target price:

Lithium Outlook: There is additional downside risk that some new lithium applications, particularly in electric vehicles (EVs), could hit production issues or the adoption of these vehicles could get delayed. Faster EV adoption globally due to changing consumer preferences and/or more stringent regulations could be an upside risk to our estimates.

Raw Material Cost Fluctuations: In the past, ALB has experienced meaningful raw material cost inflation. The company has historically managed through periods of raw material inflation but may encounter future volatility.

Environmental Factors: Certain bromine compounds have been pressured because of environmental concerns, which is a risk to ALB’s bromine franchise. Additional environmental legislation, specifically regarding the shift to cleaner fuels and EVs, could provide upside to ALB’s Lithium and Catalysts divisions.

Geopolitical Risk: ALB operates a highly profitable bromine operation in Jordan through its joint venture Jordan Bromine Company, which exposes the company to geopolitical risk. In addition, the company is exposed to country risk in Chile, where its low-cost lithium operations are located.

If the impact on the company from any of these factors proves to be greater than we anticipate, the stock will likely have difficulty achieving our target price. Likewise, if any of these factors proves to have less of an effect than we anticipate, the stock could outperform our target.