While cutting Mosaic to Sell, Goldman lifts price target for Potash Corp.

|About: Potash Corporation of Saska... (POT)|By:, SA News Editor

In suggesting investors shouldn't mistake a potash price floor for a long-term recovery, Goldman’s Adam Samuelson raises his price target for Potash (POT -1.2%) while downgrading peer Mosaic (MOS -1.3%) to Sell and maintaining a Sell rating for Intrepid Potash (IPI -1.2%).

The firm keeps POT at Neutral thanks to greater valuation support at POT given its 4.1% dividend yield, which it sees as sustainable given its pricing/cash flow forecasts; a more favorable cost outlook following recent headcount reductions, which should help the company improve utilization at lower-cost facilities; and earnings ballast from a less negative near-term outlook.

The firm's new $32 price target for POT, up from $24, still implies 5% downside, and its core industry view is that both companies will be significantly impacted.