After the market close yesterday, Albemarle (ALB) announced fourth quarter 2018 earnings that beat Wall Street earnings estimates of $1.47 by 6 cents a share and reported revenues grew 7.4% year over year to $921.7 million, against the $894.5 million consensus. The company also issued upside guidance for 2019 of $6.10 to $6.50 per share in earnings (analyst consensus projection was $6.14) and revenue of $3.65 billion to $3.85 billion (analyst consensus was $3.64 billion.)
Today, on the news shares of Albemarle climbed 7.79% to $89.26.
These very positive realists come about a week after lithium producer Livent reported disappointing results and said customers in China were delayed purchases. Albemarle specifically said in its conference call that it sees no evidence of a slowdown and that sales of “new-energy” cars had doubled in China in the last year. Albemarle also said that it believes that government incentive programs in China will continue to help electric car sales.
Today’s pop in the stock, however, only takes the shares back to where they were on December 10 before a steady decline into 2019. The 200-day moving average is now at $92.77 and the 50-day moving average stands at $79.32. A key to the stock is how quickly it can move through that 200-day level.
Albemarle is a member of my Jubak Picks Portfolio. The shares are down 9.38% since I added them to the portfolio on August 10. 2018. My target price remains $118 a share.