Bank of America lowers PT on Albemarle stock but maintains Buy on outlook for improvement



On Monday, BofA Securities adjusted its price target Albemarle Corporation (NYSE: ), a global specialty chemicals company, lowered its shares to $51 from $54 previously while retaining a buy rating on the stock.

The change comes after AllianceBernstein (NYSE: ) released its latest quarterly earnings report, which showed first-quarter 2024 earnings per share (EPS) of $0.73 and positive net flows.

AllianceBernstein reported positive net flows in the first quarter, totaling $500 million, after three consecutive quarters of net outflows, above Bank of America's forecast of $300 million. The positive shift was attributed to strong inflows into fixed income (up $7 billion) and alternative/multi-asset classes (up $3 billion). However, equity flows continued to be negative, with outflows of $10 billion.

Looking ahead, BofA Securities expects fund flows to improve in 2024, driven by fixed income reallocations, risk reallocation strategies and continued momentum in the taxable and municipal fixed income markets.

In terms of AllianceBernstein's financial results, operating margin (op margin) is expected to increase significantly this year and continue into 2025. It expires in December, and Bernstein Research plans to divest in the second quarter of 2024.

AllianceBernstein is sticking to its target of improving operating margins by 350-500 basis points from 2023, which was reported to be 28%. The forecast indicates a focus on operational efficiency and strategic financial management aimed at improving profitability in the coming years.

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Investment Professional Insights

As the financial world digests BofA Securities' revised price target for Albemarle Corporation (NYSE:ALB), InvestingPro provides more context using a combination of live indicators and expert analysis. Albemarle's market capitalization is $13.74 billion, reflecting its important position in the specialty chemicals industry. Despite concerns about sales and profitability, the company has a strong dividend record, with an impressive 31 consecutive years of dividend payments. This consistency demonstrates Albemarle's commitment to shareholder returns.

The company currently has a price-to-earnings ratio of 8.72, and its trailing twelve-month adjusted price-to-earnings ratio was 7.76 through the fourth quarter of 2023. This valuation metric shows Albemarle's earnings valuation below the industry average, which could indicate market undervaluation or specific challenges facing the company. In addition, the company's revenue growth rate in the past 12 months was 31.38%, a significant increase that highlights its ability to expand revenue.

InvestingPro Tips further revealed that although analysts predict that net profit will decline this year, they also expect Albemarle to remain profitable. This dual perspective highlights the volatility of share price movements, further evidenced by a six-month total price return of -12.53% and a one-year total price return of -36.35%. Investors may find these insights critical when considering the company's future performance, especially in light of the recent price target revision. To explore more InvestingPro tips for Albemarle, including 7 other tips not listed here, visit https://www.investing.com/pro/ALB.Remember to use coupon code PRONEWS24 Annual or biennial Pro and Pro+ subscriptions receive an additional 10% discount.

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