We recently published a list of 10 Most Oversold EV Stocks to Buy According to Analysts. In this article, we are going to take a look at where Albemarle Corporation (NYSE:ALB) stands against other most oversold EV stocks to buy according to analysts.
As per PwC, the race for EV adoption has been heating up, thanks to the tailwinds such as consumer interest, robust buy-in by automakers, and accelerated government funding. The electric transportation saw strong support from the 2021 Infrastructure Investment and Jobs Act – which finances $7.5 billion in EV charging infrastructure. Furthermore, the Inflation Reduction Act offered tax credits for new and used electric passenger and commercial vehicles.
What’s Next for EV Market?
As per Research and Markets, the EV market is anticipated to reach US$1.58 trillion in 2033 from US$600.13 billion in 2024. The growth is expected to be aided by increased public awareness, the requirement for reducing emissions, developments around battery technology, supportive government policies and incentives, and strong investments in renewable energy sources.
Governments and consumers continue to adopt EVs as a cleaner alternative to conventional ICE vehicles because of elevated concerns regarding environmental sustainability and the requirement to reduce greenhouse gas emissions, according to Research and Markets. Additionally, improvements in the electric car range, together with charging infrastructure due to battery technological developments, have been fueling industry expansion.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Factors to Support EV Transition
As per Dentons, the Polycentric Law Firm, emerging markets (EMs) continue to be central to global EV adoption, courtesy of increased urbanization, government incentives, and economic growth. Notably, the investments in EV infrastructure and battery technology have been fueling wider adoption. Furthermore, local manufacturing and innovation, including cost-effective EVs and off-grid charging stations, have been bolstering economic development in local EV industries of EMs.
The flexible manufacturing platforms continue to support OEMs in adapting more efficiently to fluctuating market dynamics, like regulatory changes and changes in consumer preferences. Dentons believes that alliances with Chinese EV makers are expected to allow legacy OEMs to use advanced EV technologies, cost-efficient production methods, and well-established supply chains provided by Chinese OEMs. This can help facilitate the transition of legacy OEMs to electrification. Overall, 2025 might need flexibility, innovation, and adaptation in the broader automotive industry amidst economic pressures and evolving consumer expectations. Through using the advancements in EVs, Software-Defined Vehicles (SDVs), and manufacturing technologies, OEMs can place themselves well in the highly competitive and dynamic market.
Our Methodology
To list the 10 Most Oversold EV Stocks to Buy According to Analysts, we sifted through several online rankings to shortlist the companies catering to the broader EV sector. Next, we chose the ones that have declined significantly over the past year and that analysts see significant upside to. Finally, the stocks were arranged in ascending order of their average upside potential, as of February 21. We also mentioned hedge fund sentiments around each stock, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A team of scientists in a laboratory observing the sophisticated engineering of specialty chemicals.
Albemarle Corporation (NYSE:ALB)
% Decline Over 1 Year: ~33.3%
Average Upside Potential: ~27.03%
Number of Hedge Fund Holders: 36
Albemarle Corporation (NYSE:ALB) is a critical player in the EV battery industry, mainly via its involvement in lithium production and supply. The company’s vertically integrated structure and low-cost assets continue to provide it with a competitive edge in the broader industry. Albemarle Corporation (NYSE:ALB)’s cost-cutting initiatives and productivity improvements can enhance its competitive position in the lithium market. It has proactively re-phased growth investments and reduced 2024 capex by more than $450 million YoY. The sustained position in the lithium market is expected to fuel growth for the company amidst the accelerated adoption of EVs.
Therefore, Albemarle Corporation (NYSE:ALB)’s growth is expected to stem from higher demand for energy storage solutions and EVs. The company has highlighted that global EV demand grew by 25% YoY in 2024, which was led by China. Notably, US EV sales have been benefitting from model availability and affordability, opines Albemarle Corporation (NYSE:ALB). While the near-term market remains dynamic, the long-term lithium demand drivers are intact, with battery costs below $100/kWh pack average, aiding EV affordability. The company also mentioned that grid demand continues to outperform, up 49% YoY in 2024, courtesy of installations in the US and China.
Therefore, as a leading supplier of lithium, Albemarle Corporation (NYSE:ALB) appears to be well-placed to benefit from
long-term contracts with EV manufacturers. This can result in enhanced market position and revenues.
Overall, ALB ranks 7th on our list of most oversold EV stocks to buy according to analysts. While we acknowledge the potential of ALB as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than ALB but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
