Goldman Sachs Downgrades Albemarle To Neutral (ALB)

Goldman Sachs is downgrading shares of Albemarle ALB to Neutral from Buy, and it removed the stock from America's Buy List. It still has a $75 price target on shares. In a note to investors, Goldman writes, "In our view, ALB's outperformance over the past two years vs. the S&P 500 was due to strong sales growth driven by robust end market demand for ALB's high quality specialty products. This, coupled with strict cost vigilance helped deliver very impressive margin expansion, particularly in the Polymer Solutions segment and the Catalyst business. While scope for further margin expansion does exist, in our view near-term upside is limited. Despite our downgrade, we still expect positive trends to remain and we maintain our 2011/12/13 EPS estimates of $4.30/$5.00/$5.75. At ALB's recent investor day event, management introduced its ‘Vision 2015', targeting annual sales growth of 10%-13%, which is expected to yield 14%-17% organic EPS growth (to $6.75-$7.75), with targeted acquisitions increasing EPS to $8.40-$9.75 by 2015. We believe at current levels the stock more fully reflects heightened investor expectations and we see fewer near-term catalysts to propel the share price higher." Shares of ALB lost $2.18 yesterday to close at $66.10, a loss of 3.2%.