|Bid||29.15 x 1000|
|Ask||30.00 x 21500|
|Day's Range||29.47 - 29.82|
|52 Week Range||19.23 - 32.32|
|PE Ratio (TTM)||N/A|
|Earnings Date||Nov 6, 2018|
|Forward Dividend & Yield||0.10 (0.32%)|
|1y Target Est||34.29|
Mosaic (MOS) is well placed to gain from increasing global demand for fertilizers. The Vale Fertilizantes acquisition will also deliver significant synergies.
Fertilizer affordability last week, which ended on August 10, was largely unchanged, as reported by Mosaic (MOS). The Affordability Index, which represents crop prices over fertilizer prices, gives us a picture of how the relationship between the two has progressed.
Last week, which ended August 10, potash prices were flat to positive at the locations in the chart below. They started rising as a result of tighter supply and strong demand. Usually, the demand for fertilizer is inelastic since farmers need fertilizers to achieve yields in order to meet the global food demand.
For the week ended August 10, MAP (monoammonium phosphate) prices remained firm, mirroring DAP (diammonium phosphate) price movements. The supply-demand conditions for phosphate fertilizers were tight, similar to what CF Industries (CF) indicated about nitrogen fertilizers. Companies (XLB) such as Mosaic (MOS), Nutrien (NTR), and Israel Chemicals (ICL) have managed to control their capacities to contribute to the supply dynamics.
Last week, DAP (diammonium phosphate) prices remained flat to positive at most of the locations in the chart below. They were steady, acting as a positive catalyst for companies (MOO) such as Mosaic (MOS), Israel Chemicals (ICL), and Nutrien (NTR).
Natural gas is one of the most important inputs required for nitrogen fertilizers. Companies such as CF Industries (CF) that are located in the United States are at a unique advantage with access to low natural gas prices. In its quarterly earnings, CF Industries cited low natural gas as a key driver for improvement in margins.
In our recent series Where Does the Fertilizer Industry Go from Here? we saw the outlook for fertilizer prices provided by CF Industries (CF), Mosaic (MOS), and Nutrien (NTR) in their second-quarter earnings releases. We saw how fertilizer prices have been a key driver of these companies’ better-than-expected results.
The fertilizer sector remained under pressure between August 3 and August 13, with the benchmark VanEck Vectors Agribusiness ETF (MOO) declining 2.4% over the period and the S&P 500 Index falling 53 basis points. Clearly, the agribusiness sector was more impacted than the broader market indexes by trade war tensions and the Turkish currency crisis.
Markets ended lower on Monday as Turkey???s financial crisis deepened denting investors??? confidence once again, leading to huge selloffs in financial stocks.
Previously in this series, we discussed how the potash supply-demand environment is expected to remain balanced. In 2018, potash prices have gradually risen, which indicates a reversal in the industry’s trend. Last year, the prices remained depressed, which was negative for companies like Intrepid Potash (IPI). The company had to amend its terms with creditors. Nutrien (NTR) and Mosaic (MOS) saw their potash segments’ (MOO) earnings decline.
The potash market was no different than nitrogen and phosphate. Potash prices were depressed due to oversupply. Recently, potash prices have been rising, which explains the supply-demand dynamics.
With the supply environment for phosphate fertilizers tightening, we must also look at how the demand will likely play out. The demand could impact prices and phosphate producers (XLB) like Mosaic (MOS), Nutrien (NTR), and Israel Chemicals (ICL).
Where Does the Fertilizer Industry Go from Here? Now, we’ll discuss phosphate fertilizers—the second most heavily used fertilizer type after nitrogen fertilizers. Mosaic (MOS), which is one of the major phosphate fertilizer producers, provided some insights into the phosphate market during its earnings call.
After the earnings release, the stock dropped almost 2% to $86.5 but recovered after that. On August 8, FMC recovered to $89.1, which was almost 1% higher than the closing of $88.3 before the earnings release. The current consensus recommendation for FMC as of August 8 was a “buy.” Out of the 18 analysts in the above chart, three analysts had a “strong buy” recommendation, which was one fewer than last month, while the number of analysts recommending a “buy” remained unchanged at 11 month-over-month.
With most major fertilizer players done with their second-quarter earnings, we discussed how analysts reacted positively and upgraded stocks like CF Industries (CF), Mosaic (MOS), and Nutrien (NTR). To learn more, read Analysts Are Becoming More Bullish on Fertilizer Stocks. In this series, we’ll discuss why fertilizer stocks received several upgrades from Wall Street analysts.
Month-over-month, the number of analysts recommending a “strong buy” remained unchanged at five. Consequently, the number of analysts recommending a “hold” rose to seven from six a month ago. This price target was close to what the analysts had at the beginning of this year.
Mosaic (MOS) reported its second-quarter earnings on August 6. The company missed the top-line estimates but beat the bottom-line estimates for the quarter. The overall recommendation for Mosaic as of the date of this writing was a “buy.” Month-over-month, analysts have also become bullish on Mosaic, similar to what we saw for CF Industries. As of August 8, four analysts recommended a “strong buy” on the stock, while six analysts had a “buy” on the stock, which was unchanged over the last month.
The current consensus price target for CF Industries stood at $47.95, which rose by almost 9.9% from $43.63 a month ago. The median price target also rose to $50 from $43 a month ago. The stock closed at $48.57 on August 8, which was already above the mean price target and only 2.9% below the median price target.
The fertilizer sector has gained momentum on the back of favorable fertilizer prices along with a tighter supply environment in the global market. The overall agribusiness sector ETF, the VanEck Vectors Agribusiness ETF (MOO), has gained about 4.1% YTD as of August 8 compared to the S&P 500 Index (SPY), which experienced a 38-basis-point loss over the same period.
NEW YORK, Aug. 09, 2018-- In new independent research reports released early this morning, Fundamental Markets released its latest key findings for all current investors, traders, and shareholders of The ...