In a week when the S&P 500 gained 6% through 12:30 p.m. ET Friday, Albemarle (ALB 1.65%) stock was down about 4.3% as of this writing despite gaining some ground Friday, according to data provided by S&P Global Market Intelligence.

With low lithium prices hurting the company, as evidenced by its latest numbers and outlook, more analysts are turning cautious about the lithium stock.

Albemarle downgrades 2023 outlook, stock falls

Albemarle reported its third-quarter earnings on the first day of November. Here are some numbers you'd want to know (all changes year over year):

  • Net sales: up 10% to $2.3 billion.
  • Operating loss of $140 million versus a profit of $890 million in the year-ago quarter.
  • Net income: down 66% to $320 million.

Lower prices and higher cost of goods sold drove Albemarle's profits lower. More importantly, Albemarle reported much higher year-over-year sales growth in its last two quarters. In Q2, for example, it reported a 60% year-over-year jump in net sales, driven by higher volumes as well as pricing.

Albemarle's latest numbers, therefore, confirmed the market's fears that the company's sales growth is decelerating rapidly. Worse yet, Albemarle now expects its sales to grow by 30% to 35% this year. In August, the company guided for 40% to 55% growth in sales for the year. It also downgraded its adjusted-earnings guidance for 2023 to $21.50 to $23.50 per share from $25 to $29.50 per share.

Not surprisingly, Albemarle shares fell this week, with some analysts also slashing their prices on the lithium stock, according to TheFly. Analysts at Oppenheimer, for example, cut the stock's price target to $308 per share from $344 per share given the ongoing volatility in lithium prices.

Lithium prices have crashed this year primarily because of slowing global demand for electric vehicles. As of this writing, lithium prices had slumped more than 60% year to date and were trading at levels last seen in September 2021, according to data from Trading Economics.

Why this is an opportunity to buy Albemarle stock

While it's true that low lithium prices are detrimental to Albemarle's top and bottom lines, it's a near-term pain. The long-term story for lithium remains intact as electrification, especially of vehicles, continues to gather steam across the globe.

To top that, Albemarle still expects to grow sales by 30% or more this year. That's not at all bad given how much lithium prices have fallen. For long-term investors, there couldn't be a better time to buy Albemarle stock.