The increase in the price of corn and soybeans has been a gamechanger in the fertilizer industry, and Barclays (NYSE:BCS) sees CF Industries (NYSE:CF) and Mosaic (NYSE:MOS) benefiting strongly from it.
Barclays expects and especially strong move from CF Industries, raising their price target on them from $105 to $130 over the next year, and for Mosaic, they raised the price target on them from $60 to $69.
For CF, Barclays sees them driven by higher raising nitrogen prices, increasing estimates for CF from $264 a ton to $296 a ton and its 2011 estimate from $257 to $288. The firms 2010 average phosphate price estimate was increased from $410 to $494 and its 2011 estimate raised from $408 to $474.
Concerning phosphate prices for Mosaic, Barclays boosted their 2011 and 2012 phosphate price estimate from $451 and $433 to $480 and $476.
CF closed Monday at $121.39, losing $1.14, or 0.93 percent. Mosaic closed down at $72.33, falling $0.83, or 1.13 percent.
Showing posts with label Nitrogen Fertilizer. Show all posts
Showing posts with label Nitrogen Fertilizer. Show all posts
Tuesday, November 2, 2010
Wednesday, October 27, 2010
Agrium (NYSE:AGU), CF (NYSE:CF), The Way to Play Corn says Soleil
With corn, and by extension - nitrogen fertilizer, rising in price, the best way to play the sector is through Agrium (NYSE:AGU) and CF Industries, says Soleil Securities.
Soleil initiated coverage on Agrium with a "Buy" rating, saying they have an attractive valuation.
"In addition to CF Industries (Buy), we view Agrium as a way to play corn through nitrogen fertilizer...Ag-flation is back. The macro environment is favorable due to low interest rates and a weak dollar. Crop prices are up an average of 50% since June 30 on production-negative and therefore price-positive USDA grain reports ... Even after a 70% move since June 30 compared to a 12% gain in the S&P 500, the shares are now selling just at 12.7x our above-consensus EPS estimate of $6.83 per share."
Agrium Closed Monday at $88.53, gaining $1.31, or 1.50 percent. Soleil has a price target of $100 on them.
Soleil initiated coverage on Agrium with a "Buy" rating, saying they have an attractive valuation.
"In addition to CF Industries (Buy), we view Agrium as a way to play corn through nitrogen fertilizer...Ag-flation is back. The macro environment is favorable due to low interest rates and a weak dollar. Crop prices are up an average of 50% since June 30 on production-negative and therefore price-positive USDA grain reports ... Even after a 70% move since June 30 compared to a 12% gain in the S&P 500, the shares are now selling just at 12.7x our above-consensus EPS estimate of $6.83 per share."
Agrium Closed Monday at $88.53, gaining $1.31, or 1.50 percent. Soleil has a price target of $100 on them.
Tuesday, October 19, 2010
Agrium (NYSE:AGU), Viterra (TSE:VT) Set to Outperform?
Much of the agricultural news has been overshadowed by the interesting story related to BHP's (NYSE:BHP) bid of Potash Corp. (NYSE:POT), but the real story is how the lower estimated corn yields will have on nitrogen more than anything, as that's the main fertilizer used on corn. Agrium Inc. (NYSE:AGU) and Viterra Inc. (TSE:VT) could be among the stronger beneficiaries of the trend.
Some analysts are starting to realize that phosphate and potash producers may not benefit near as much as people looking at the sector in a general way may realize.
Corn prices are expected to have support over $5 a bushel over the next 12 months and maybe longer, and that means corn farmers will have more capital to use to invest in nitrogen.
Agrium is set to surpass analysts' expectations, and Viterra has a strong export portfolio which should benefit them in relationship to nitrogen.
Some analysts are starting to realize that phosphate and potash producers may not benefit near as much as people looking at the sector in a general way may realize.
Corn prices are expected to have support over $5 a bushel over the next 12 months and maybe longer, and that means corn farmers will have more capital to use to invest in nitrogen.
Agrium is set to surpass analysts' expectations, and Viterra has a strong export portfolio which should benefit them in relationship to nitrogen.
Tuesday, October 5, 2010
Potash (NYSE:POT), Intrepid Potash (NYSE:IPI), Agrium (NYSE:AGU) Rated by Gleacher & Co
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.
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.
Friday, September 24, 2010
CF Industries (NYSE:CF) Gets Mixed Coverage
CF Industries (NYSE:CF) has received a lot of coverage from companies lately, with two looking positive at the fertilizer company, and one looking negative, with most investors seeming to believe the negative report rather than the two positive ones.
The damage was done by Dahlman Rose, which downgraded CF in the middle of Thursday's trading session, dropping their rating from "Buy" to "Hold." The stock plunged afterwards.
Soleil on the other hand upgraded CF from "Hold" to "Buy," while raising their price target from $105 to $116.
They said CF "embeds a paired trade: long corn and short natural gas."
Earnings per share for full year 2011 was raised from $8.10 to $9.44 by Soleil.
Susquehanna initiated coverage on CF with a "Positive," citing the strength of their nitrogen business.
The company said they consider CF the "purest" nitrogen play in the North American market.
With nitrogen profits expected to explode by Susquehanna, they believe nitrogen EBITDA could could grow as much as 77 percent in 2010, with 2011 adding another 28 percent.
"CF provides the best leverage to surging corn prices, and our
expectations for a 4 million increase in 2011 corn acreage," said Susquehanna.
They have a price target of $129 on CF.
CF closed at $98.68 Thursday, plummeting $2.75, or 2.71 percent.
The damage was done by Dahlman Rose, which downgraded CF in the middle of Thursday's trading session, dropping their rating from "Buy" to "Hold." The stock plunged afterwards.
Soleil on the other hand upgraded CF from "Hold" to "Buy," while raising their price target from $105 to $116.
They said CF "embeds a paired trade: long corn and short natural gas."
Earnings per share for full year 2011 was raised from $8.10 to $9.44 by Soleil.
Susquehanna initiated coverage on CF with a "Positive," citing the strength of their nitrogen business.
The company said they consider CF the "purest" nitrogen play in the North American market.
With nitrogen profits expected to explode by Susquehanna, they believe nitrogen EBITDA could could grow as much as 77 percent in 2010, with 2011 adding another 28 percent.
"CF provides the best leverage to surging corn prices, and our
expectations for a 4 million increase in 2011 corn acreage," said Susquehanna.
They have a price target of $129 on CF.
CF closed at $98.68 Thursday, plummeting $2.75, or 2.71 percent.
Monday, August 30, 2010
Agrium (NYSE:AGU) Interested in Potash (NSYE:POT) Assets
If BHP Billiton Ltd. (NYSE:BHP) acquires Potash Corp. of Saskatchewan Inc. (NSYE:POT), Agrium (NYSE:AGU) has let it be known that they would be interested in buying up some of the assets of the fertilizer company once the takeover was completed.
Agrium Chief Executive Officer Mike Wilson said in an interview, “If those assets come out at a value that makes sense for Agrium, of course we would look at them. The company is interested in agricultural assets and businesses in any part of the world.
Units that could possibly be put up for sale would be those producing nitrogen and phosphates. Wilson said he would even be interested in some of their potash if it was put up for sale.
Wilson sees the overall outlook for nitrogen, phosphate and potash fertilizers as very good. Phosphate could come under pressure in 2011 because of increased supply. Wilson sees demand over the next year and a half absorbing that and new supply will be needed at that time.
Agrium is in midst of attempting to acquire Australian largest wheat exporter AWB Ltd., as they're waiting for approvals to go forward.
Agrium Chief Executive Officer Mike Wilson said in an interview, “If those assets come out at a value that makes sense for Agrium, of course we would look at them. The company is interested in agricultural assets and businesses in any part of the world.
Units that could possibly be put up for sale would be those producing nitrogen and phosphates. Wilson said he would even be interested in some of their potash if it was put up for sale.
Wilson sees the overall outlook for nitrogen, phosphate and potash fertilizers as very good. Phosphate could come under pressure in 2011 because of increased supply. Wilson sees demand over the next year and a half absorbing that and new supply will be needed at that time.
Agrium is in midst of attempting to acquire Australian largest wheat exporter AWB Ltd., as they're waiting for approvals to go forward.
Wednesday, August 18, 2010
Goldman (NYSE:GS) Upgrades CF Industries (NYSE:CF) to "Buy"
Goldman Sachs (NYSE:GS) upgraded CF Industries (NYSE:CF) from "Neutral" to "Buy" Tuesday, as the demand for phosphate and nitrogen continues to increase.
Along with the upgrade for CF Industries, Goldman added them to their "conviction buy" list.
The price target Goldman set for them is $110 a share.
CF closed Tuesday at $88.53, gaining $3.94 a share, or 4.66 percent. Volume was almost double the normal trading amount for the day.
The fertilizer company has a market cap of $6.29 billion.
Along with the upgrade for CF Industries, Goldman added them to their "conviction buy" list.
The price target Goldman set for them is $110 a share.
CF closed Tuesday at $88.53, gaining $3.94 a share, or 4.66 percent. Volume was almost double the normal trading amount for the day.
The fertilizer company has a market cap of $6.29 billion.
Thursday, July 29, 2010
Potash (NYSE:POT) Earnings Double in Second Quarter, Revenue Soars
Potash Corp. of Saskatchewan Inc. (NYSE:POT) (TSE:POT) by all measures had a solid quarter, as earnings were over double what they were in the second quarter last year and revenue soared.
Earnings surged $472 million, or $1.55 a share, a major improvement over last year's $186.2 million, or 61 cents a share. Revenue for the quarter grew from $856 billion last year during the same quarter to $1.44 billion.
Analysts had been looking for earnings to come in at $1.19 a share, so Potash blew past those expectations. They also exceeded expectations for revenue, where analysts estimated $1.40 billion.
The company was led by increased sales of potash in the quarter, which rose over three times what they sold last year, generating $641 million, up from $210.7 million last year.
One negative factor was the fall in potash prices for the quarter, shrinking 35 percent to $309 a ton. Volume was able to overcome that though.
Sales of phosphate gained also, although much more moderately, reaching $363.5 million, from the $324.7 million last year. Pricing was better this time for phosphate, increasing 13 percent to $458 a ton.
Nitrogen sales were also much higher growing from $320.6 million last year to $433.3 million this year. Prices for nitrogen grew 20 percent, with volume up to 1.3 million tons from 1.2 million.
Earnings surged $472 million, or $1.55 a share, a major improvement over last year's $186.2 million, or 61 cents a share. Revenue for the quarter grew from $856 billion last year during the same quarter to $1.44 billion.
Analysts had been looking for earnings to come in at $1.19 a share, so Potash blew past those expectations. They also exceeded expectations for revenue, where analysts estimated $1.40 billion.
The company was led by increased sales of potash in the quarter, which rose over three times what they sold last year, generating $641 million, up from $210.7 million last year.
One negative factor was the fall in potash prices for the quarter, shrinking 35 percent to $309 a ton. Volume was able to overcome that though.
Sales of phosphate gained also, although much more moderately, reaching $363.5 million, from the $324.7 million last year. Pricing was better this time for phosphate, increasing 13 percent to $458 a ton.
Nitrogen sales were also much higher growing from $320.6 million last year to $433.3 million this year. Prices for nitrogen grew 20 percent, with volume up to 1.3 million tons from 1.2 million.
Friday, July 16, 2010
JPMorgan (NYSE:JPM) Upgrades Mosaic (MOS), Raises Price Target
Mosaic was upgraded by JP Morgan (NYSE:JPM), with the company raising them from "Neutral" to "Overweight."
The fertilizer producer, and overall sector, should perform strongly in the near term, probably the reasoning behind the upgrade. Long-term, there are a lot more challenges for Mosaic and others, and there isn't anything that can be seen which will change that.
Unfortunately Mosaic focuses on concentrated potash and phosphate, which will remain under pricing pressure after this season. Nitrogen should be a more profitable fertilizer, and that isn't the specialty of Mosaic.
Even so, the price target was raised by JP Morgan for Mosaic from $45 to $52.
The fertilizer producer, and overall sector, should perform strongly in the near term, probably the reasoning behind the upgrade. Long-term, there are a lot more challenges for Mosaic and others, and there isn't anything that can be seen which will change that.
Unfortunately Mosaic focuses on concentrated potash and phosphate, which will remain under pricing pressure after this season. Nitrogen should be a more profitable fertilizer, and that isn't the specialty of Mosaic.
Even so, the price target was raised by JP Morgan for Mosaic from $45 to $52.
Thursday, June 10, 2010
Morgan Stanley (NYSE:MS) Recommends CF Industries (NYSE:CF)
Nitrogen fertilizer giant CF Industries (NYSE:CF) received a valuable recommendation from Morgan Stanley (NYSE:MS) today, and the stock responded by rising to its highest level (in a day) in over 15 months.
Morgan Stanley analysts Vincent Andrews and Megan Davis also increased the rating of the stock to "overweight," an increased its price target over the next 12 months to $90.
In a note to clients, the two analysts said, "CF offers an attractive risk/reward as it has been the worst performing fertilizer stock."
Before today, CF had plunged by 35 percent in 2010, far more than its competitors have dropped during that same period.
The share price rose to $63.67, an increase of $4.70, or 7.97 percent, as of 2:24 PM EDT.
Morgan Stanley analysts Vincent Andrews and Megan Davis also increased the rating of the stock to "overweight," an increased its price target over the next 12 months to $90.
In a note to clients, the two analysts said, "CF offers an attractive risk/reward as it has been the worst performing fertilizer stock."
Before today, CF had plunged by 35 percent in 2010, far more than its competitors have dropped during that same period.
The share price rose to $63.67, an increase of $4.70, or 7.97 percent, as of 2:24 PM EDT.
Saturday, May 22, 2010
CF Industries (NYSE:CF) Sees Savings from Terra Acquisition on High End
Only a short time after acquiring Terra, CF Industries (NYSE:CF) says it looks like the two companies have more synergies than expected, and savings should be on the high end of the $105 million to $135 million estimated, in about two years. That's figured on an annual basis.
Some of the particular segments of the company which will benefit strongly are vendor services, transportation, an storage, according to CF President and CEO Steve Wilson.
Wilson said he is "confident" after the early results have come in, and they haven't "been that hard to identify and realize so far."
CF took over Terra for $4.72 billion after pursuing the company for about a year, bidding against major competitors like Agrium (NYSE:AGU) and Yara International.
This make CF Industries the largest producer of nitrogen in North America, and second-largest in the world.
Some of the particular segments of the company which will benefit strongly are vendor services, transportation, an storage, according to CF President and CEO Steve Wilson.
Wilson said he is "confident" after the early results have come in, and they haven't "been that hard to identify and realize so far."
CF took over Terra for $4.72 billion after pursuing the company for about a year, bidding against major competitors like Agrium (NYSE:AGU) and Yara International.
This make CF Industries the largest producer of nitrogen in North America, and second-largest in the world.
Saturday, May 15, 2010
CF Industries (NYSE:CF) Projects Strong Second Quarter
With farmers planting later this year and nitrogen, phosphorus and potassium fertilizer applications behind as a result of that, it caused revenue and earnings in the first quarter for CF Industries (NYSE:CF) to underperform.
Consequently, the same conditions which led to a poor first-quarter performance should have a positive effect in the second quarter, with overall phosphate demand projected to increase in the U.S. for the 2010 by 15 percent.
The oil spill or leak in the Gulf of Mexico could adversely affect the company, as they may have to find new transportation, as much of their phosphate products come from Florida and is shipped across the Gulf and up the Mississippi River.
CF may have to ship via railroad, something the company is hoping to avoid being forced to do. Nitrogen shouldn't be hindered in any way by the oil incident. At this time they haven't had to take any of these steps, as shipping routes are still open.
Revenue in the first quarter fell to $502.4 million, a 26 percent plunge, while the company had a net loss of $4.4 million, or 9 cents a share. Last year in the same quarter CF generated earnings of $62.7 million, or $1.28 a share.
Consequently, the same conditions which led to a poor first-quarter performance should have a positive effect in the second quarter, with overall phosphate demand projected to increase in the U.S. for the 2010 by 15 percent.
The oil spill or leak in the Gulf of Mexico could adversely affect the company, as they may have to find new transportation, as much of their phosphate products come from Florida and is shipped across the Gulf and up the Mississippi River.
CF may have to ship via railroad, something the company is hoping to avoid being forced to do. Nitrogen shouldn't be hindered in any way by the oil incident. At this time they haven't had to take any of these steps, as shipping routes are still open.
Revenue in the first quarter fell to $502.4 million, a 26 percent plunge, while the company had a net loss of $4.4 million, or 9 cents a share. Last year in the same quarter CF generated earnings of $62.7 million, or $1.28 a share.
Saturday, April 17, 2010
CF Industries Holdings (NYSE:CF), Terra Industries (NYSE:TRA), Married at Last
CF Industries Holdings Merges with Terra Industries
After acquiring over 90 percent of Terra Industries (NYSE:TRA), CF Industries Holdings (NYSE:CF) and them will become the second-largest manufacturer of nitrogen fertilizer in the world.
The 90 percent acquisition allows the deal to go through without the approval of shareholders of Terra.
Agrium Inc. (NYSE:AGU) had battled CF Industries for Terra before dropping the $5.43 billion bid.
Shareholders of Terra will get 0.0953 of a share of CF Industries common stock for each share they own of Terra, along with $37.15 in cash a a share.
In a statement, president and CEO of CF Industries, Stephen Wilson said, "A combined CF Industries and Terra creates a strong leader in the global fertilizer industry with superior assets that will generate long-term value for stockholders, provide more benefits to customers and offer increased opportunities to employees."
After acquiring over 90 percent of Terra Industries (NYSE:TRA), CF Industries Holdings (NYSE:CF) and them will become the second-largest manufacturer of nitrogen fertilizer in the world.
The 90 percent acquisition allows the deal to go through without the approval of shareholders of Terra.
Agrium Inc. (NYSE:AGU) had battled CF Industries for Terra before dropping the $5.43 billion bid.
Shareholders of Terra will get 0.0953 of a share of CF Industries common stock for each share they own of Terra, along with $37.15 in cash a a share.
In a statement, president and CEO of CF Industries, Stephen Wilson said, "A combined CF Industries and Terra creates a strong leader in the global fertilizer industry with superior assets that will generate long-term value for stockholders, provide more benefits to customers and offer increased opportunities to employees."
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