UBS analysts downgraded shares of Albemarle (NYSE:ALB) to Neutral from Buy, slashing the price target to $140 from $253 per share in a note Monday.
The analysts stated that they have decided to move to the sidelines based on the increased uncertainty.
"We are downgrading ALB to Neutral as we see a greater risk to lithium volume growth and more downside earnings risk to 2024," they explained. "We earlier saw lithium prices start to inflect up, but pricing has turned down again (-7% in last 2 wks)."
The analysts noted that the UBS auto team recently reduced EV growth forecasts due to weaker demand expectations in Europe and the US, and they see risks to further downside revisions.
"Lower spodumene prices also create a negative timing lag, which will impact 2024 EBITDA," they added.
The investment bank acknowledged that with the stock down 50% since the July peak, its shares could be undervalued if prices move up on a more normalized 2025. However, they "need more visibility on demand, pricing, & capex to get more constructive."