By Christiana Sciaudone
Investing.com -- Tesla (NASDAQ:TSLA)'s vertical integration in lithium is bad news for Albemarle (NYSE:ALB).
Shares of the chemical company are down 14% after Baird analyst Ben Kallo said he believes Tesla's move could be an overhang. The positive lithium and electric vehicle sentiment that has been driving Albemarle's stock up over the past few months could unwind.
Kallo reiterated a neutral rating and $75 price target, according to The Fly. The stock is up 13% in 2020, currently trading around $82.64.
At Tuesday's highly-anticipated and disappointing Battery Day, Elon Musk said Tesla's working to secure the rights to a 10,000-acre lithium clay deposit in Nevada as part of a plan to build a cheaper and more efficient battery, TechCrunch reported. The company is planning on building a lithium conversion facility.
Lithium sales at Albemarle were down 13% in the second quarter compared to a year earlier. Adjusted earnings before interest, taxes, depreciation and amortization for the segment fell 33%.