A lot of companies have been getting the same treatment Agrium (NYSE:AGU) has been getting, as they were downgraded by TD Newcrest based on valuation from the recent runup in share price.
TD downgraded Agrium from "Action List Buy" to "Buy," saying it was "due mainly to stock price appreciation of 26% since our upgrade in mid-August."
This represents what TD evidently thinks will be a potential short-term pullback, as they raised their price target on the agricultural company from $95 to $105 a share.
Some things they see needing to happen support in nitrogen prices, as "domestic urea price has increased by 40% to about US$350/ton (fob NOLA) by the end of Q3/10, and continues to show reasonable strength so far into Q4/10." Additionally, "...the U.S. urea wholesale inventory as of the end of August is still - 14% lower than it was in the equivalent 2008 period..."
They also like the company if the price of corn continues to find support. "The corn price has rebounded over 75% since reaching an annual low in June 2010, while wheat, soybean, and rice price increased 59%, 24%, and 38%, respectively, over the same period."
Agrium closed Thursday at $86.33, down $0.48, or 0.55 percent.
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