Albemarle price target lowered to $159 from $178 at KeyBanc

KeyBanc lowered the firm’s price target on Albemarle to $159 from $178 and keeps an Overweight rating on the shares. The firm notes that on March 4th, Albemarle announced its intent to offer $1.75B of convertible preferred equity. On March 6th, the offering was increased to $2B. Albemarle also granted the Underwriters a 30-day option to purchase up to $300M of additional shares. Upon settlement on March 8th, Albemarle will issue 2M shares of Preferred Stock with a mandatory conversion on March 1, 2027, and an additional 0.3M shares should the Underwriters exercise their allotment in full. All in, the proceeds will be $1.94B-$2.24B, representing dilution of 16% at the current stock price, KeyBanc says. The firm notes that dilution may be reduced to 14.9% if Albemarle’s stock price exceeds $131.27 at the time of conversion.