NEW YORK (AP) -- Shares of fertilizer companies mostly rose Monday after an analyst upgraded several in the sector, saying the stocks are poised to grow no matter what happens with crop sizes this year.
Dahlman Rose analyst Charles Neivert said in a note to clients he believes it's now less likely the crop will reach record levels expected by the U.S. Department of Agriculture. He also believes the chance for lower prices has increased.
If crop sizes are as large as expected, fertilizer companies should benefit, he said. In that scenario, stock prices should climb ahead of the traditional fall application. But if weather hurts the crop, the analyst notes that farmers should plant more acreage next year and prices will be driven up. That would benefit fertilizer stocks even more, he said.
Neivert recommends investors buy up shares ahead of an expected positive report on world agricultural supply and demand, scheduled to be released by the USDA July 11.
He raised his rating on CF Industries Holdings Inc. and Potash Corp. of Saskatchewan Inc. to "Buy" from "Sell." He also lifted Agrium Inc., Rentech Nitrogen Partners LP and The Mosaic Co. to "Buy" from "Hold" and Intrepid Potash Inc. and CVR Partners LP to "Hold" from "Sell."
All the stocks traded higher despite lower broader markets. CF Industries, Rentech, and CVR Partners all gained about 2 percent.