The stock price of Albemarle, a chemicals company that is also one of the world’s largest producers of lithium, a key raw material for electric vehicle batteries, has rallied by 31% over the last month (21 trading days). This compares to the S&P 500 which gained about 9% over the same period. Albemarle recently released its preliminary Q4 results, noting that it would see adjusted earnings of between $8.35 to $8.75 per share for the quarter, ahead of the market consensus estimate of under $8 per share. Moreover, guidance for FY 2023 was also strong, with adjusted EPS expected at between $26 to $33. Albemarle also issued more long-term guidance expecting its net sales to grow at an annual rate of 19% to 21% over the next five years. Separately, growth stocks in general have also done well in recent weeks, as the Fed has slowed down the pace of its interest rate hikes. This is also likely to have helped ALB, which is seen as a proxy for the electric vehicle battery space.
However, now that ALB stock has seen a rise of about 31% over the last month, will it continue its upward trajectory in the near term, or is a decline imminent? Going by historical performance, there is a 65% chance of a rise in ALB stock over the next month. There were 37 instances in the last 10 years when Albemarle stock saw a trailing 21-day rise of 31% or more. Now 24 of those instances resulted in ALB stock rising over the subsequent one-month period (21 trading days). This historical pattern reflects 24 out of 37, or about 65% chance of a rise in Albemarle stock over the next month. See our analysis on Albemarle Stock Chance of Rise for more details.
Calculation of ‘Event Probability’ and ‘Chance of Rise’ using last ten years data
After moving 6% or more over five days, the stock rose in the next five days on 53% of the occasions. After moving 10% or more over ten days, the stock rose in the next ten days on 53% of the occasions After moving 31% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 65% of the occasions.
This pattern suggests that ALB stock could see some gains in the near term.
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