Gleacher & Co. took rating aim at some fertilizer companies, including Potash (NYSE:POT), Intrepid Potash (NYSE:IPI) and Agrium (NYSE:AGU).
All of the companies had their earnings per share raised by Gleacher, based on the assumption the companies have or will be able to increase prices in 2010 and 2011.
For Potash Corp., which Gleacher maintained a "Neutral" rating, they are expected to increase potash volume as well as have higher nitrogen and DAP prices.
Gleacher said, "We are raising our 2010 EPS to $5.44 from $5.15 and our 2011 EPS estimates to $7.30 from $6.90, primarily to reflect higher DAP and nitrogen prices, as well as higher potash volume. We maintain our Neutral rating and take-over fair value of $160 which represents 14.5X our 2011 EBITDA and 22X 2011E EPS. Risks to our price target include 1) failure of BHP and POT to come to an agreement regarding BHP's bid; 2) volatile crop prices that could dampen buyer sentiment; 3) failure of potash producers to raise prices."
The maintained their "Buy" on Agrium, also basing that on the probability of pricing power for the three major nutrients.
"We are raising our 2010 EPS by $0.02 to $5.11 and our 2011 EPS by $0.95 to $6.65 on higher nitrogen, phosphate and potash price assumptions," they said.
Concerning Intrepid Potash, they consider their valuation already high, so they downgraded them from "Buy" to "Neutral." That was even with the same reasoning they could also have pricing power for their fertilizer and higher volume too.
Gleacher noted, "We are raising our 2010 EPS by $0.08 to $0.54 and our 2011 EPS by $0.15 to $1.15 on higher potash volume and pricing assumptions, as well as higher langbeinite prices. However, at current valuations, we are no longer aggressive buyers of IPI and thus are downgrading our rating."
Intrepid also has limitations because of their regional parameters.
Showing posts with label Approval Ratings. Show all posts
Showing posts with label Approval Ratings. Show all posts
Tuesday, October 5, 2010
Thursday, August 19, 2010
BP (NYSE:BP) Tarnished Image Getting Some Shine
BP (NYSE:BP) took a big hit to its brand and image when the Gulf oil spill and the resultant media coverage erupted across the world.
That has slowly began to change now that they've stopped the oil from leaking into the Gulf, and a permanent plugging of the well near at hand.
Another factor was the relatively small effects of the oil spill on the Gulf. The media and the Obama administration had hyped the damage so much that once the oil well stopped flowing, the results surprised most people with about 75 percent of the oil already having been removed naturally by the Gulf itself, or to a much lesser extent, by skimming the waters with ships.
Approval ratings for BP are over double what they were when they stood at an anemic 15 percent, according to an AP poll, which shows 33 percent of people approve of the job BP has been doing.
That has slowly began to change now that they've stopped the oil from leaking into the Gulf, and a permanent plugging of the well near at hand.
Another factor was the relatively small effects of the oil spill on the Gulf. The media and the Obama administration had hyped the damage so much that once the oil well stopped flowing, the results surprised most people with about 75 percent of the oil already having been removed naturally by the Gulf itself, or to a much lesser extent, by skimming the waters with ships.
Approval ratings for BP are over double what they were when they stood at an anemic 15 percent, according to an AP poll, which shows 33 percent of people approve of the job BP has been doing.
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