BMO Capital downgraded Potash Corp. (NYSE:POT) from "Outperform" to "Market Perform."
A growing number of investors are questioning whether or not it's time to take profits with Potash, as it soared after the hostile bid from BHP Billiton (NYSE:BHP), which it rejected.
That rejection generated speculation BHP would sweeten the bid, making investors hold off to see if that would materialize.
BHP CEO Marius Kloppers has attempted to manage expectations there, saying the bid is a fair one, and implying he isn't going to acquire Potash at any cost.
Executives at Potash believe the bid is far too low, and are looking for a white knight to acquire the company, although that hasn't happened, suggesting the bid by BHP is indeed a fair one.
A new development which could challenge that are reports on Russian potash suppliers, who are attempting to raise potash prices in its Brazilian and Asian markets.
An earlier attempt this year failed to convince customers, so we'll have to wait to see if the price increases really happen.
If they do, then Potash would have a supportive argument for being vastly undervalued.
Russian potash producers pretty much guide the global potash prices through the Belarusian Potash Company, the equivalent of Canada's Canpotex, both marketing arms of the industry.
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