11:17 AM EDT, 07/11/2025 (MT Newswires) -- Albemarle (ALB) is likely to face an oversupplied lithium market through 2026, with realized pricing expected to move up only modestly year-over-year, UBS Securities said in a note Friday.

The firm's 2026 lithium price forecast is 6% to 15% below consensus, which puts its estimated 2026 earnings before interest, taxes, depreciation and amortization about 14% below consensus expectations.

UBS said that under its price scenario, it does not expect Albemarle to generate significant free cash flow, which could put the dividend at risk if a prolonged downturn persists and, at a minimum, leaves the shares unattractive at an estimated about 3% free cash flow yield.

While some investors may look to buy the dip, UBS believes earnings estimates will need to rebase lower and expectations will decline in a "lower for longer" environment, with more downside risk to the stock in the medium term.

The firm downgraded Albemarle to sell from neutral and cut its price target to $57 from $64.

Shares of Albemarle were down more than 4% in recent trading.

Price: 71.24, Change: -3.03, Percent Change: -4.08