Lithium Miner Albemarle Outshines S&P 500 With 26% Surge In August - But Wall Street, Retail Traders Still Not Fully Convinced

Albemarle stock rose 25.2% in August, making the lithium miner the top gainer in the S & P 500 index for the last month. Shares of the company, however, are not yet receiving a great deal of confidence from retail traders.

The rally followed a statement by Chinese electric vehicle battery-making giant Contemporary Amperex Technology (CATL) on Aug. 11, which announced the suspension of operations at its Yichuan project due to the expiration of its mining license.

With mining expected to remain shut for three months, according to CATL estimates, lithium prices have increased by over 30% in the past month. The rally has helped lithium miners recover some of the losses from earlier this year.

Retail sentiment on Stocktwits about Albemarle, the world's leading lithium producer, was still in the 'bearish' territory at the time of writing.

The stock has seen only a 7% rise in retail watcher count on Stocktwits over the past year, and a modest 0.8% increase in August, with message volume in the 'low' zone as of the last reading.

Despite the surge in shares, some Wall Street analysts remain unconvinced about its long-term appeal.“We had originally viewed many of these announcements as temporary and due to one-offs, but we also recognize a growing expectation of lasting curtailments given continued increases in lithium price,” Baird analyst Ben Kallo noted last week.

Kallo raised the price target of the stock to $68 from $58, but maintained a 'Sell' rating on the stock.“We still have limited visibility in market dynamics and government policy within China, but we are raising our price target to reflect the pricing move,” he said.

Year-to-date, Albemarle shares are still down 1.8%, as lithium prices plunged well below 2022 highs. The company has already paused a key refinery project in the U.S. and has seen several rounds of layoffs over the past year.

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