David White

Potash Corp: Dynamics of Supply and Demand Drive Earnings Growth

I should also note that the mean one year target price has increased recently (on Yahoo at least) to $305. This is the target price for the end of the current fiscal year. The current fiscal year ends in December for POT. If this means the mean expected price for mid to late January 2009 is $305, the stock would have to almost double in the next six months to get there. You pretty much have to consider it a great buy, even with oil and grain prices going down. The statistics about the currently completely depleted levels of POT in storage do not lie. People cannot get enough of it at the moment. It seems unlikely in the extreme that the company will actually see a reversal (or a problem of any kind) with its earnings growth.

Add the fact that the next earnings announcement should put the PE at about 19, given a price of $180. Then you see that POT is really trading under its long term trend. It should move up.