Albemarle Stock Soars. The Reason Is Easy to See.

Albemarle stock is up 50% this year. Above, a lithium mine in the Atacama Desert in Chile. (John Moore / Getty Images)

Key Points

• Albemarle’s stock rose 7.9% to $128.44 after UBS upgraded it to Buy, citing an impending lithium mining upcycle.
• An analyst predicts a lithium market deficit by 2026 due to higher energy storage demand and slower Western capacity additions.
• Lithium prices are currently around $13,000 per metric ton, up from recent lows of $8,500, but down from $85,000 in late 2022.

Shares of lithium miner Albemarle gained again on Friday. It caught another upgrade with one analyst saying a new lithium mining upcycle is about to begin.

The stock rose 5.1% to $125.19. The S&P 500 and Dow Jones Industrial Average both gained about 0.2%.

The stock move came after UBS analyst Joshua Spector upgraded Albermarle to Buy from Hold on Thursday evening. He took his price target to $185 from $107 a share.

“Lithium [is] entering a new upcycle,” he wrote. “We see a combination of higher energy storage demand and years of slower Western capacity additions now pushing lithium markets into deficit in 2026. We expect lithium prices to move up through the year.”

“Deficit” in commodity markets is music to investors’ ears. It means pricing power for commodity producers.

Lithium prices are about $13,000 per metric ton, up from recent lows of closer to $8,500 per metric ton. In late 2022, benchmark lithium was $85,000 per metric ton. That was another time that lithium commodity markets were in “deficit” amid booming demand for EVs.

Lithium is a key component of lithium-ion batteries that are used in EVs as well as stationary storage applications.

As is often the case with commodities, however, high prices lead to more supply, which leads to lower prices. Global production from lithium mines amounted to about 240,000 metric tons in 2024, according to the U.S. Geological Survey. That number was less than 80,000 tons in 2019. Looking ahead, Spector sees enough demand growth to soak up all the added lithium supply.

His call is still out of consensus. Overall, 37% of analysts covering the stock rate shares Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%.

However, analysts are warming up to Albermarle. Shares have picked up two Buy ratings in recent months and lost one Sell rating.

The average analyst price target for Albemarle stock is about $112 a share. While that’s below where the stock is trading today, it’s up from July, when the average target price bottomed out at about $75.

Albemarle stock is up almost 50% this year. Shares peaked north of $325 in late 2022.

Write to Al Root at allen.root@dowjones.com