After slumping through April, shares of Albemarle (ALB -0.43%) got off to a roaring start in May. Beyond its strong first quarter 2022 earnings report, management's auspicious 2022 forecast and enthusiasm from analysts for the lithium stock had investors clicking the buy button this week.
From the end of trading last week through the close on Friday, shares of Albemarle skyrocketed by 25.8%, according to data provided by S&P Global Market Intelligence.
Albemarle reported Q1 2022 revenue of $1.13 billion and earnings per share (EPS) of $2.38. Analysts had estimated the company would report sales of $1.02 billion and EPS of $1.63.
The company's strong performance was also visible with regard to its year-over-year growth: Sales rose by 36%, and diluted EPS rose by 156%.
Management's optimistic view of what lies ahead also delighted investors. Initially, Albemarle had forecast 2022 revenue in the $4.2 billion to $4.5 billion range; however, it now anticipates sales in the $5.2 billion to $5.6 billion range. Similarly, the company is now forecasting 2022 adjusted diluted EPS of $9.25 to $12.25 -- up from its original guidance range of $5.65 to $6.65.
A tide of bullish sentiment among analysts also helped propel the stock's rise this week.
- Citigroup raised its price target on Albemarle from $262 to $279.
- Mizuho lifted its price target from $243 to $293.
- Deutsche Bank hiked its price target from $250 to $290.
Albemarle is one of the most popular lithium stocks, so the attention that bulls paid it this week is unsurprising. For those considering charging up their returns by adding the stock to their portfolios now, however, it may be worth exercising some patience. After its run-up, the stock trades at a lofty valuation of 70.9 times operating cash flow, a hefty premium to its five-year average ratio of 24.1.