Gleacher & Co. said it maintaining its "Buy" rating on Mosaic Company (NYSE:MOS), while increasing their earnings per share estimate, citing higher pricing power on growing demand for fertilizer.
"We expect MOS to report FYQ1 EPS of $0.72 (vs. prior $0.68), up 218% y/y but down 19% q/q in the seasonally slower Q1. As the year progresses, we expect the rebound in fertilizer demand to continue gaining traction and we have increased our FY2011E EPS to $3.95 from $3.60 and FY2012E to $4.55 from $3.95 on surging DAP prices and higher potash price assumption," said Gleacher.
"With supportive crop prices, tight inventories, and anticipated strong demand heading into the fall application season, the momentum has returned to the fertilizer industry. In addition, we believe the BHP (NYSE:BHP) bid for Potash (NYSE:POT) has unlocked the value of potash. We maintain our belief that investors can continue owning Mosaic heading into the fall."
Mosaic closed the week at $62.09, gaining $0.74, or 1.21 percent.
The price target on the fertilizer company was raised by Gleacher from $56 to $70.
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