Albermarle (NYSE:ALB) shares slumped in the opening session today after the specialty chemicals major outlined measures to drive growth and optimize costs.
ALB has scaled back its capital expenditure outlay for 2024 to between $1.6 billion and $1.8 billion versus $2.1 billion in 2023. This indicates a rephasing of larger-scale projects in the short term to focus on projects that are in advanced stages.
This includes commissioning of the Meishan lithium conversion facility, completion of commission activities for Trains 1 and 2 at the Kemerton lithium conversion facility, and deferred investment in the Albermarle Technology Park in North Carolina. Additionally, the company will defer spending at the Richburg mega-flex lithium conversion facility. These actions point to the changing dynamics in the lithium value chain.
Further, Albermarle is slashing its headcount and lowering costs in the sales, general, and administrative areas to drive annual cost savings of $95 million. It expects to realize over $50 million of these savings in 2024. Consequently, Albermarle expects to record an associated charge in the first quarter. At the same time, the company expects to unlock over $750 million of cash flow in the short term.
Is ALB a Good Stock to Buy?
Overall, the Street has a Moderate Buy consensus rating on Albermarle. Following a nearly 48% decline in the company’s share price over the past year, the average ALB price target of $178.14 points to a mega 41.4% potential upside in the stock.
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