ALB - Embedded Expectations Analysis - 2018 03 05
ï€ Albermarle Corporation (ALB:USA) currently trades above historical averages relative to UAFRS-based (Uniform) Earnings, with a 21.3x Uniform P/E. Although negative management sentiment suggests near-term upside may be limited, at these levels, market expectations remain far too bearish given the firm's strong macro tailwinds and favorable positioning. As such, longer-term outperformance is likely warrantedï€ Specifically, management may lack confidence in their ability to drive further adjusted EBITDA improvements, and may have concerns about high debt restructuring and acquisition and integration costs. Furthermore, they may lack confidence in their discussions with key accounts about contract terms, and may have concerns about the sustainability of strong demand in their Refining Solutions segment. That said, market expectations are for Uniform ROA to remain flat despite strong macro tailwinds and favorable positioning. At these valuations, longer-term equity upside is thus likely warranted
Albemarle is a global developer, manufacturer and marketer of chemicals across a range of end markets including energy storage, petroleum refining, consumer electronics, construction, automotive, lubricants, pharmaceuticals, crop protection and custom chemistry services. The company's segments include: Lithium, which develops and manufactures a range of basic lithium compounds and lithium specialties and reagents; Bromine Specialties, which includes products used in fire safety solutions and other chemicals applications; and Catalysts, which includes Clean Fuels Technologies, fluidized catalytic cracking catalysts and additives, and performance catalyst solutions.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.