Albemarle (ALB) PT Raised to $130 at Jefferies

Jefferies analyst Laurence Alexander raised the price target on Albemarle (NYSE: ALB) to $130.00 (from $120.00) while maintaining a Buy rating.

The analyst comments "The ag sector is at a cyclical trough, particularly in terms of sentiment: top-down models suggest a turn only in 2028-2030 (cf. here) generate little investor push-back, reflecting widespread skepticism on SAF. At the company level, evidence of structural change is already improvement, with net technology royalties on track to be cut ~70% by 2025 and royalty neutrality by 2030, coupled with >300bps of margin improvement since 2022. This has been obscured by the cyclical headwinds in crop protection, which we expect to return to a growth trajectory by 2026-2027. At the level of market structure, we expect the EU to vote in favor of adopting gene editing technology in Q1 (cf. here). We estimate the longer-term potential gene editing TAM at $45-$50bn (vs. est'd seed TAM of ~$54bn in 2021, ~$67bn currently and ~$90bn in 2035), and 2x-5x that in the blue-sky scenarios where nutrient efficiency, output traits (e.g. gluten-free barley or wheat), abiotic stress management and farm productivity value propositions are better than the GM equivalent (e.g. faster response cycles to novel threats). GM crops represent ~50% of seed sales, but touch ~20% of relevant row crop acres and ~10% of total cropland. By region, ~35% of GM crop acres are in the US, ~32% in Brazil, ~11% in Argentina; and by crop, soy represents ~49%, corn ~33% and cotton ~12%. We estimate the market giving full credit to a gene editing tailwind could lift Corteva's valuation multiple 200-300bps over the next 2-3 years, supporting an $88-$95 share price by the end of 2026, or 48%-58% potential upside."

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