Potash Should Jump on Massive JPMorgan Estimates Boost

JPMorgan is out with a major earnings change on Potash (POT) this morning raising its 2009 EPS estimate to $18.50 from $11.75 a share (vs. consensus $12.70).

Firm's 2008 earnings estimate goes to $10.50 from $8.95 a share.

Notablecalls: Wow, this is probably one the largest EPS estimate raises I've seen in a long time. POT has gotten whacked over the past two days on an apparent "sell-the-news" reaction to their fantastic results.

I suspect POT will be re-testing the $200 level today following JPM's call.

PS: Currently, RBC Capital has the Street high $300 target on POT. This target is based on their 2009 EPS of $15.02, which is over $3 lower than JPM's new EPS estimate, for what it's worth.

Comments

[Gunslinger]

JPM is eating the old-school analysts' lunch. I've been impressed with their calls I've seen in the last year.

[Great Wazoo]

In a perfect world, you would be right. However, the market seems to be controlled by the short sellers, and articles like the one by Chip Hanlon just get more people panicked. I think AG and OIL are too strong here for a steep pullback. I guess we will have to wait for next week to tell whether or not this is just a one day consolidation.

[Amidwesternneighbor]

Looks like a good "buy on pullback" opportunity from here! The story is not dead by a longshot: the growth in ag is ongoing due to the rise of the developing world - there are some hungry people who can now afford more and better quality food. Add to that the world's energy needs...even if ethanol hasn't turned out to be the saviour once purported, there is no dearth of demand for crops in general. IOW, I don't think I'd be long specific crops, since those may shift....but being long in the fertilizer and equipment space is a big-time growth story for the long haul!

[clitosil]

whatever happened to good ole manure?

[NormanLepoff, M.D.]

Interesting article. I am glad I own POT!

[User 186641]

Pot has been whacked by the panic people. They are ruining the market and should find another hobby. It is absurd that the debt ridden financials such as citi, ba, and all the guys that still have write offs rallied this week and people sold pot. Pot has the potential based on very conservative estimates to at least reach $ 250 and was headed that way last Fri when it bounced back to close at 207.00 and change. The rbc guy broke that back, even though if the panic guys would read the story, even rbc still said a target of 300.00. Then add to that the people that add pot to the other commodity story of gold. Fertilizer is a different play than gold, silver etc. There is an actual demand for fertilizer and look today at the resulkts of agu, and I heard the estimates of the mos ceo last night , so we tough pot guys have to stick it out and maybe take some profits above, 200.00, rebuy below 180 and let it run. The next earnings should make a new high, hopefully and or when pot finally raises their prices to 1000 ton. And hello, mr rbc, please adjust your pe on pot....The new 2008 estiamte is 9.50 or up.