Focusing in on the valuation of Albemarle Corporation (NYSE:ALB), we can take a look at several ratios. One of the quickest ways to determine the projected value of a stock is the price to earnings growth, or PEG ratio. This formula was popularized by Peter Lynch and according to his calculations, a stock which is fairly valued will have a price to earnings ratio equal to its rate of growth. Simply put, a stock with a PEG ratio of 1 would be considered fairly valued.
A stock with a ratio of under 1.0 would be undervalued and a stock with a PEG over 1.0 would be considered over valued. Albemarle Corporation currently has a PEG ratio of 0.90.Investing in the stock market will always involve some level of risk. Investors often have to determine how much they are willing to risk, and try to project what the potential reward could be. Taking on too much risk may put the average investor out of their comfort zone. Finding that sweet spot for risk appetite may help investors get on the correct path to conquering the markets. As companies continue to report quarterly earnings, investors will be watching which companies post larger than expected surprises. Analysts will also be watching the numbers closely in order to make sense of the results and update estimates accordingly.
Most importantly investors want to know where the stock is headed from here. In order to get a sense of Wall Street sentiment, we can look to equity research analyst estimates.
Albemarle Corporation (NYSE:ALB) currently has an average analyst recommendation of 2.20 according to analysts. This is the average number based on the total brokerage firms taken into consideration by Beta Systems Research. The same analysts have a future one-year price target of $106.21