JPMorgan slashed its earnings and price targets for Albemarle Corp. (NYSE: ALB) amid falling lithium prices, triggering a 5.16% drop in shares to $134.21 on Tuesday.

Analyst Jeffrey Zekauskas maintained a Neutral rating but lowered the December 2027 price forecast to $140 from a previous December 2026 target of $160.

Lower Lithium Prices Pressure Outlook

The bank reduced its 2026 adjusted EBITDA estimate by 14.4% to $2.88 billion from $3.37 billion. Its 2027 estimate fell 18.4% to $2.93 billion from $3.59 billion.

Earnings per share estimates also declined. The 2026 adjusted earnings estimate dropped to $12.05 per share from $14.20. The 2027 estimate fell to $11.65 from $15.35.

These revisions reflect weaker lithium prices. China lithium carbonate prices averaged $24,810 per metric ton in the second quarter but averaged about $21,625 so far in the third quarter.

JPMorgan now expects lithium prices to remain in the low-$20-per-kilogram range, down from its previous model of the mid-$20 range. Each $1-per-kilogram change could affect Albemarle’s annual EBITDA by about $250 million.

Third-Quarter Profit Expected to Fall

JPMorgan expects third-quarter adjusted EBITDA of $668 million. This would fall from $858 million in the second quarter but rise from $226 million a year earlier.

The firm also expects lower quarterly lithium sales volume and a weaker product mix.

Meanwhile, Albemarle faces delays at the Greenbushes CGP3 plant following a June fire. The plant restarted Aug. 1, but JPMorgan now expects full production rates by the end of the first quarter of 2027.

What the Numbers Show

The sensitivity of Albemarle’s profitability to lithium pricing is acute. With each $1-per-kilogram price change impacting annual EBITDA by approximately $250 million, the shift from mid-$20s to low-$20s pricing models directly explains the multi-billion dollar downward revision in long-term EBITDA estimates. This high operating leverage means modest absolute declines in commodity prices translate into significant percentage drops in reported earnings power.

The bank said Albemarle trades near its price forecast and carries a fair valuation for a high-quality but volatile lithium producer.

Albemarle (NYSE: ALB) has affirmed its sales guidance for the fiscal year ending in 2026, setting expectations between $5.700 billion and $6.000 billion. This reaffirmation places the company’s projected revenue below the consensus estimate of $6.334 billion, highlighting a divergence between management’s outlook and market analyst predictions for the period.

The company’s decision to maintain this specific range indicates a steady approach to its financial planning despite external pressures or market volatility that may have influenced the higher estimates. By keeping the guidance unchanged from its previous statement, Albemarle signals confidence in its ability to meet the lower bound of its projected sales, even as it acknowledges the gap with broader market sentiment.

Guidance Details

The following table outlines the key financial figures disclosed in the update:

What the Numbers Show

The most significant aspect of this disclosure is the gap between the upper end of Albemarle’s guidance and the market estimate. With the high end of the guidance at $6.000 billion, the company is projecting revenue that is approximately $334 million lower than what analysts had anticipated. This suggests that Albemarle may be facing headwinds in its core markets or adopting a more cautious view on demand and pricing dynamics for the remainder of the fiscal year.

Investors should note that the guidance remains within the previously stated range, meaning no further downward revision was issued at this time. However, the persistent miss against estimates warrants close monitoring of subsequent quarterly reports to understand whether this gap narrows or widens as the fiscal year progresses.