Albemarle: great performance, but it's no longer cheap
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The index continues to be in a correction phase, which could later lay the groundwork for a long-term upward move, provided the key levels listed below remain intact. MOL: Moving through a correction phase, showing a neutral picture for now; we are awaiting a concrete signal. Richter: It remains a realistic scenario that a rounding bottom pattern has formed with a neckline at 12,500. This could provide an opportunity for a pullback to the 11,875 level. Magyar Telekom: Despite the dividend payment, the stock was already in a correction phase. Opus: A break in the downtrend is imminent; this would “only” require a break above the downtrend line. 4iG: It remains in a downtrend, but the 1,875 level is a key support. No buy signal has been received yet, but if the price stabilizes above this level, the path could open up ahead of a reversal.
The share price of Albemarle, the leader of the lithium market, has risen sharply in recent weeks, climbing by around 125% in a year and more than tripling since its low point in April last year. The outlook for the lithium market remains very favorable, with sales of electric vehicles and demand for energy storage also seeing a big jump on an annual basis, although in the former case, some slowdown in growth is expected in 2026. In line with the improving fundamentals, Albemarle's share price has also rallied, but in our view, the valuation has run somewhat ahead of the lithium price, so the risk / reward ratio no longer looks outstanding, and the stock price has exceeded our already raised target price of USD 150. For more risk-tolerant investors, holding may still be justified with partial profit-taking, but we are removing Albemarle from our Equity Top Pick List.
Lithium market outlook
The lithium market has been doing really well over the past few months. According to data from Rho Motion, electric car sales reached 20.7 million units in 2025, representing an annual growth rate of 20% (for comparison, S&P estimates that slightly more than 91 million cars were sold globally in 2025). Most electric cars were sold in China (+17% year-on-year, 12.9 million units), but the growth rate was higher in Europe (+33% year-on-year, 4.3 million units). In contrast, sales figures in North America declined moderately, which may be due in part to the phasing out of tax incentives last year. However, Rho Motion analysts expect slower growth in the global electric car market in 2026 for various reasons (e.g., easing of European emission targets, changes in tax payments and subsidies in China, etc.).
The energy storage market also performed very well in 2025, which has become another key source of lithium demand in recent years. According to data from Benchmark Mineral Intelligence, the energy storage market accounted for nearly 20% of lithium-ion battery demand last year, with year-on-year growth of 51% (electric cars accounted for 75% of lithium-ion battery demand). This market is expected to be strong in 2026 as well.
Meanwhile, with lithium prices relatively depressed, activity on the supply side has been lower in recent years, so it is conceivable that the currently oversupplied lithium market will once again become deficient (though this is not guaranteed, of course). S&P estimates that there will be a surplus of 109,000 tons in 2026, compared to last year's surplus of 141,000 tons. In contrast, Morgan Stanley analysts expect a deficit of 80,000 tons, while UBS expects a deficit of 22,000 tons. As can be seen there are quite large discrepancies in the forecasts, which is not unusual for a commodity that is less transparent but has strong growth in demand.
In any case, lithium market prices have moved in a positive direction in recent months thanks to the favorable supply and demand situation.
Source: Bloomberg, OTP Multi-Asset Strategies
Valuation and steep rise in share price
The outlook for the lithium market therefore remains positive, but on the other hand, the question arises as to what investor expectations Albemarle's current share price reflects. The company's shares were trading in the USD 50-60 range for a while last year (falling to USD 50 following the Trump administration's tariff announcements in April, while the lithium market price bottomed in July). However, since the April low, Albemarle's share price has more than tripled and is currently trading around the USD 160-180 range (but approached USD 200 at the end of January).
The last time the stock price was this high was in the fall of 2023, while Albemarle reached its all-time high in the fall of 2022 (over USD 300). In comparison, the current price of lithium (lithium carbonate) is around 130-140 thousand yuan/ton, while in September-October 2023 it was still 180-200 thousand yuan/ton, which fell sharply by the end of November. At the peak of the share price, lithium was priced at nearly 600 thousand yuan/ton.
The company's P/E ratio is more than 48x (USD 3.42) based on the expected EPS for 2026, and 23x (USD 7.18) based on the EPS for 2027. It should be noted that cyclical companies often have similarly high valuations when prices are near the bottom of the cycle, and the valuation picture may improve with higher lithium prices. More interestingly, Albemarle generated EPS of USD 22.4 in the record year of 2022 and USD 13.7 in the equally strong year of 2023. In the latter year, the average lithium price was approximately 260,000 yuan/ton. With similar profit generation, the P/E ratio would only be ~12x at the current price, but this would require much higher lithium prices than today. Of course, it is not only pricing that determines profit, but also the volume of lithium extracted and the cost structure.
Due to favorable supply and demand, we still see room for lithium prices to rise, so with favorable stock and commodity market sentiment, Albemarle's share price could go even higher, but based on the above data, it appears that valuations have run a little ahead of themselves. We see little chance of lithium prices approaching their previous highs (e.g., due to mine reopenings, brownfield expansions, etc.).
Taking all this into account, we are removing Albemarle’s shares from our Equity Top Pick List, primarily for valuation reasons and because the risk/reward ratio no longer appears outstanding. Regardless, holding the stock may still be justified for risk-tolerant investors (or for shorter-term tactical trading), but it is worth considering partial profit-taking at these levels.
The company's Q4 earnings report will be released today after market close (Wednesday, February 11). Our target price was USD 150, and Albemarle's share price has been trading above this level since the beginning of the year.
Albemarle technical picture
The price decline seen in the last two weeks is, for now, a correction above the ideal upward trend. In the next two weeks, if it does not reach a new peak, a reversal pattern may develop. The neckline for this could be 162.5 and a close below that level may bring a complete reversal. However, for this scenario to occur, the curve would have to return to the range above 175. There is also a gap from above, and if this is not filled, there is an even greater chance of a correction. Strong support is only available in the 100 zone.
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