Albemarle Corporation (ALB) Stock Valuation — DCF Analysis
Chemicals - Specialty · NYSE
Current Price
$170.42
Intrinsic Value
$179.48
+5.0% margin of safety
COMPETITIVE MOAT
↑Lithium Production Dominance
Albemarle holds significant lithium reserves and production capacity, crucial for the booming electric vehicle market. This scale provides cost advantages and supply chain control.
↑Specialty Chemicals Expertise
Beyond lithium, ALB has a strong position in bromine and catalysts. These specialized products serve diverse industrial needs, creating recurring revenue streams.
↑Strategic Resource Access
The company's access to key mineral resources, particularly lithium brine and hard rock deposits, is a substantial barrier to entry for competitors. This secures long-term supply.
INVESTMENT RISKS
↓Commodity Price Volatility
Lithium prices are subject to significant fluctuations driven by supply and demand. This volatility directly impacts Albemarle's revenue and profitability.
↓Geopolitical and Regulatory Uncertainty
Operations in various countries expose ALB to changing regulations, political instability, and potential resource nationalism. These factors can disrupt production and increase costs.
↓Execution and Expansion Challenges
Scaling up production to meet demand requires significant capital investment and successful project execution. Delays or cost overruns in expansion projects pose a risk.
Base case
ALB base case valuation
A base case discounted cash flow model for ALB estimates an intrinsic value of about $179.48 per share, against a current price of $170.42. The model assumes 11.1% annual free cash flow growth, a 10.0% discount rate, and a 30x exit multiple.
Intrinsic Value
$179.48
Margin of safety
+5.0%
Expected annual return
+1.0%
Base case assumptions: 11.1% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the ALB valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Albemarle Corporation respond.
Open DCF Calculator for ALBCompany Overview
Albemarle Corporation stands as a global innovator, producing and distributing a diverse portfolio of engineered specialty chemicals. Its business operations are divided into three principal segments: Lithium, Bromine, and Catalysts. The Lithium division supplies a variety of lithium compounds, including lithium carbonate, hydroxide, and chloride, alongside critical reagents like butyllithium. These materials are vital for manufacturing lithium-ion batteries found in electric vehicles and consumer electronics, as well as for high-performance greases, thermoplastic elastomers used in tires and plastics, and as catalysts for chemical reactions, organic synthesis in areas like steroid chemistry, vitamins, and the pharmaceutical industry. This segment also delivers cesium products for chemical and pharmaceutical applications, zirconium, barium, and titanium for pyrotechnic devices such as airbag initiators, offers expert technical services for the safe handling of reactive lithium products, and provides recycling solutions for lithium-containing by-products. The Bromine segment focuses on bromine and bromine-based fire safety compounds. It produces an array of specialty chemicals, including elemental bromine, various bromides, and brominated powdered activated carbon, which are utilized in chemical synthesis, fluids for oil and gas drilling, mercury emission control, water purification, and food processing. Additionally, it provides tertiary amines, which serve as key ingredients in surfactants, biocides, and sanitizers. Finally, the Catalysts segment offers a range of catalytic agents, including those for hydroprocessing, isomerization, and alkylation, alongside fluidized catalytic cracking (FCC) catalysts and additives, as well as organometallics and curatives. Albemarle's products are integral to numerous industries, including energy storage, petroleum refining, consumer electronics, construction, automotive, lubricants, pharmaceuticals, and crop protection. Established in 1887, the company's headquarters are located in Charlotte, North Carolina.
Financial Metrics — ALB Stock Valuation Data
Revenue/Share (TTM)
$46.62
FCF/Share (TTM)
$4.90
ROIC (TTM)
2.2%
ROE (TTM)
-2.4%
P/FCF
34.8x
EV/EBITDA
35.5x
FCF Yield
2.87%
Debt/Equity
0.19x
Based on trailing twelve-month data, ALB shows a free cash flow per share of $4.90 and a ROIC of 2.2%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 34.8x and FCF yield of 2.87% are important context metrics when evaluating ALB's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of ALB?
Albemarle Corporation currently generates $4.90 in free cash flow per share. At the current price of $170.42, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is ALB undervalued?
ALB trades at a P/FCF ratio of 34.8x with a free cash flow yield of 2.87%. This P/FCF is in a moderate range. However, whether ALB is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value ALB stock using DCF?
To perform a DCF valuation on Albemarle Corporation: (1) Start with the trailing free cash flow per share ($4.90) as the base, (2) project future FCF growth over 5-10 years based on Chemicals - Specialty industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting ALB's risk profile — with a debt-to-equity of 0.19x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to ALB?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Albemarle Corporation, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Chemicals - Specialty trends, then discounting those amounts to today's dollars. ALB's ROIC of 2.2% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect ALB stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For ALB, with a debt-to-equity ratio of 0.19x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 35.5x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See ALB PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Basic Materials valuationsDCF and P/E value ALB with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.