Albemarle (ALB) has executed through the downturn and is positioning for recovery, with the company now showing "improving" structural fundamentals, BofA Securities said in a Tuesday research note.

BofA said that the company delivered fiscal 2025 cost savings of $450 million and is guiding to a further $100 million to $150 million of incremental cost and productivity improvements, supporting its 2026 earnings before interest, taxes, depreciation and amortization guidance of $2.4 billion to $2.6 billion, versus consensus of $1.7 billion.

Additionally, the current lithium pricing supports profitable production across most of Albemarle's existing and planned portfolio, excluding Kemerton, improving confidence in earnings visibility, BofA said.

BofA raised its fiscal 2026 EBITDA estimate to $2.43 billion from $2.31 billion, on account of higher realized lithium pricing assumptions into H1 and progress on cost and productivity initiatives.

BofA upgraded its rating on Albemarle to buy from neutral and its price target to $190 from $167.

Price: 167.88, Change: +1.53, Percent Change: +0.92