Thu, Apr. 28, 9:16 AM| Thu, Apr. 28, 9:16 AM
Thu, Apr. 28, 8:46 AM
- Potash Corp. (NYSE:POT) -6.1% premarket after reporting slightly lower than expected Q1 earnings and cutting its full-year earnings outlook due to weak demand and lower prices.
- POT now sees FY 2016 EPS of $0.60-$0.80, below its previous guidance of $0.90-$1.20 and less than analyst consensus expectations for $0.92; for Q2, POT forecasts EPS of $0.15-$0.25 vs. $0.29 consensus.
- POT also cuts the upper end of its full-year guidance for potash sales volumes, and now sees 8.3M-8.8M metric tons after earlier projecting up to 9.1M tons.
- For Q1, POT says its average realized potash price fell to $178/ton from $284/ton a year earlier, while potash sales volumes tumbled to 1.8M tons from 2.3M tons a year earlier.
- POT says weak demand and increasing competition weighed on potash prices in North America while a lack of new contracts in China hurt demand.
- CEO Jochen Tilk says spot fertilizer markets appear to have finally stabilized in the last few weeks, and customer sentiment is improving.
- Now read Potash Corp.: Is another dividend cut around the corner?
Thu, Apr. 28, 6:02 AM
Wed, Apr. 27, 5:30 PM
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Tue, Apr. 19, 12:49 PM
- Potash Corp. (POT +4.5%) and Mosaic (MOS +3.1%) are downgraded to Underweight from Equal Weight at Barclays, which says low potash prices along with pressure from new capacity will "substantially limit" earnings prospects for the two companies.
- Barclays thinks potash prices may be reaching a bottom but at a lower level than it had expected, and has grown increasingly concerned that the looming Chinese contract settlement could see a more sizable reduction - approaching $70/ton - on last year's $315/ton price given current pricing across Brazil and southeast Asia and the slow pace of imports into India.
- The firm maintains Overweight rating for Agrium (AGU +3.1%) and CF Industries (CF +5.7%) but slightly lowers its respective price targets to $94 from $96 and to $40 from $43.
- Now read Potash Corp.: More pain ahead as there is no bottom in sight
Thu, Apr. 14, 11:16 AM
- Potash (POT -2.4%), Mosaic (MOS -3.5%), Intrepid Potash (IPI -8.2%) and CF Industries (CF -1.3%) are downgraded to Underperform from Market Perform at Cowen, which cites the risk of a further deterioration in the grain environment and the belief that nutrient prices and margins still have room to fall.
- Cowen expects an increase in U.S. corn acreage to 93.6M acres from 88M acres, plus anticipated gains in Brazilian and Argentine output, to cause a sizeable drop in corn prices and 2017 corn acreage, which would weigh on ag company shares.
- The firm cuts its price targets for POT to $14 from $16, MOS to $23 from $32, and CF to $25 from $44; Agrium (AGU -3.7%) and CVR Partners (UAN -3.2%) are maintained with Market Perform ratings but with reduced price targets of $86 and $8, respectively.
- Now read Potash Corp. credit rating cut at S&P on fertilizer market weakness
Tue, Apr. 12, 6:47 PM
- Potash Corp. (NYSE:POT) has its credit rating downgraded at S&P, which says it expects nitrogen, phosphate and potash prices to remain below 2015 levels for several more years, with declines of 10%-30% anticipated during 2016-18.
- The ratings agency cites low crop prices, rising supply and overall negative sentiment for commodities for its pessimistic outlook.
- S&P cuts POT to BBB+ from A-, saying the company is improving its operating efficiency and has cut its dividend and capital spending, but that those steps will not fully offset the deterioration in prices.
- S&P also downgrades credit ratings for EuroChem and K+S, while leaving Uralkali but revising the outlook to negative from stable.
- Now read Potash's costs are a headwind
Mon, Apr. 11, 6:55 PM
- Potash Corp. (NYSE:POT) and Mosaic (NYSE:MOS) are downgraded to Hold from Buy at HSBC Securities, which says sustained pressure on fertilizer prices likely will test the ability of manufacturers to weather the impact.
- Low costs and high exports likely will keep urea prices largely dependent on Chinese producers, while potash prices remain directionless due to the absence of a Chinese supply contract, which could force manufacturers to improve their cost structures, cut dividends or modify capital spending and debt levels to deal with the situation, HSBC says.
- The firm points to POT’s exposure to nitrogen fertilizer, especially ammonia, and a “less than Ideal cost base" as potential dividend payout risks, while MOS’s $100B cash buffer will help the company deal with the fertilizer pricing pressure without cutting its dividend but its relatively high potash production costs will depress earnings in a low price potash environment.
Mon, Apr. 4, 3:49 PM
- Potash (POT -3.9%) and Mosaic (MOS -4.1%) are downgraded to Sector Perform from Sector Outperform at CIBC, which says potash markets could remain soft for the foreseeable future due to price competition among the producers.
- Potash prices have continued to decline in recent weeks, meaning POT's 2016 earnings guidance announced barely two months ago already looks shaky, the firm says, adding that it believes the company will reduce the low end of its $0.90-$1.20 EPS outlook.
- CIBC also is concerned about POT's dividend, even though it already has been lowered this year; the firm calculates the payout ratio at 131% in 2016 and 78% in 2017.
- Now read How Potash can fertilize future profits in your portfolio
Tue, Mar. 22, 3:19 PM
- Potash Corp. (POT -3.9%) is downgraded to Sell from Hold with a $13.50 price target at Paradigm Capital, as potash prices remain depressed in an oversupplied market with no rebound in sight.
- POT shares are 18% higher in the past month on a broader market rally and improved market sentiment to commodity‐related stocks, but the firm says the rally is on a shaky ground as "the fundamental backdrop has not improved and [he believes] could remain challenged through the year barring a material recovery in grain prices."
- Paradigm notes that gauges of farmer spending and confidence are at or near all‐time lows, and U.S. farm net income is expected to drop another 3% in 2016, thus POT's view of flat global potash shipments in 2016 could prove too optimistic.
Wed, Mar. 16, 12:59 PM
- Mosaic (MOS -0.2%) is downgraded to Equal Weight from Overweight with a $29 price target, cut from $42, at Morgan Stanley, which expects potash to be oversupplied in the near to medium term.
- Stanley says the valuation premium of potash nutrient to phosphate has significantly contracted, and MOS's cash flow from operations has declined while there has been no reduction in the company’s capex or investment needs.
- The firm rates Potash Corp. (POT -0.1%) at Equal Weight with a $19 price target, seeing little likelihood of a meaningful recovery in potash profits, along with concerns about the company’s dividend payout ratio of nearly 100%.
Mon, Mar. 7, 10:45 AM
- Chile's government would not block a foreign takeover of lithium and potash producer SQM (SQM +2.8%), the country's mining minister says.
- A stake in SQM is up for grabs after an indirect shareholder, Oro Blanco, invited buyers in December to make an offer for its entire holding in Pampa Calichera; Oro Blanco holds ~88% of Pampa Calichera, which in turn owns ~20% of SQM.
- Potash Corp. (POT +3.7%) already owns ~30% of SQM and adding another 20% stake may give it control pf the company; China's CITIC, CLSA Capital Markets and Israel Chemicals (ICL +2.7%) also are believed to have interest in the Chilean company.
- SQM's access to vast nitrate and lithium reserves in northern Chile is expected to attract several suitors.
Wed, Mar. 2, 12:49 PM
- Monsanto (MON -7.5%) sinks after cutting its FY 2016 and Q2 profit outlook, citing weak foreign currencies, increased generic competition and compressed grower margins.
- CEO Hugh Grant says MON may not achieve its target of doubling EPS by 2019 because of the current struggles, and that MON is no longer interested in buying Syngenta (SYT -0.9%) after the latter agreed to be acquired by ChemChina.
- Before MON's announcement, the Bernstein research firm called a bottom in the agricultural cycle, which it sees as positive for MON and Potash (POT +3.4%), as spot potash prices are expected to trend positively during the spring planting season.
- Related tickers: DD -1.2%, DOW -0.8%, AGU -1.2%, CF -3.5%.
Tue, Mar. 1, 12:36 PM
- Moves by potash producers from idling mines to bartering with farmers may pay off soon for the hard-hit industry, company execs tell a BMO investor conference.
- Potash Corp. (POT +3.6%) CEO Jochen Tilk says he expects potash demand to pick up after significant supply cuts, and the company is doing its part to cut capacity by recently shutting down its newest mine in New Brunswick and announcing temporary shutdowns at two other Canadian mines.
- In a bid to cope with farmers' limited access to credit in Brazil, which has hurt demand there, Mosaic (MOS +2.6%) CEO Joc O'Rourke says his company is bartering with the farmers, allowing them to use crops as collateral to borrow money for fertilizer purchases.
- Potash sells for less than $300/metric ton in the U.S. Midwest, down from nearly $450 a year ago, according to data published by Raymond James.
- Also: AGU +2.4%.
Thu, Feb. 25, 6:58 PM
- Potash Corp. (NYSE:POT) says it will curb production at two Canadian mines for four weeks, just a month after closing its newest potash mine in New Brunswick because of weak market conditions.
- POT will curtail output at its Allan and Lanigan mines in Saskatchewan beginning March 20, a move that is expected to reduce 2016 production by 400K metric tons.
- The curtailments are not likely to stabilize potash prices, and the decision may not be material if POT is simply advancing its usual summer maintenance period, says BMO analyst Joel Jackson.
Wed, Feb. 17, 10:59 AM
- India has halted potash imports and delayed negotiations for next year's purchases until at least June, Reuters reports, as droughts have hurt demand in one of the world's biggest fertilizer consumers.
- The decision is India's first pause in potash imports in years and will be tough on suppliers already reeling from weak demand as China and Brazil also cut back on their buying.
- Spot prices of potash are at eight-year lows of ~$230/metric ton, down by more than 25% Y/Y; major suppliers to India include Uralkali, Potash Corp. (POT +5.6%), Agrium (AGU +2.3%), Mosaic (MOS +7.2%) and Uralkali.
Potash Corp. of Saskatchewan, Inc. is a fertilizer company, which produces crop nutrients, including potash, phosphate and nitrogen. The company operates through three business segments: Potash, Phosphate and Nitrogen. The Potash segment includes mineral deposits left by ancient evaporated seas... More
Sector: Basic Materials
Industry: Agricultural Chemicals
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