May 21, 2014, 12:25 PM
- Potash (POT -1.2%) is downgraded to Market Perform from Outperform at Raymond James based upon the strong upside move in POT shares over the past several months.
- While the firm says recent industry data continues to support its view that global potash fundamentals remain on the mend, it sees recent share price gains combined with a higher underlying trading multiple as reducing the risk-reward proposition available to investors.
May 14, 2014, 6:34 PM
Apr. 24, 2014, 7:58 AM
- Potash Corp. (POT) +1.8% premarket after Q1 earnings and revenue beat analyst expectations and the company raises its sales outlook for the year.
- Q1's realized potash price was $250/metric ton, far below $363 from the same period last year, but low prices are helping to boost purchases, as sales volume rose to 2.3M metric tons vs. 2.2M a year ago.
- POT now expects to sell 8.3M-8.7M metric tons of potash this year, up slightly from earlier guidance of 8.2M-8.6M and far better than 2013 (8.1M) or 2012 (7.2M).
- Issues downside Q2 guidance, seeing EPS of $0.40-$0.45 vs. analyst consensus estimate $0.49; raises bottom end of FY 2014 EPS outlook to $1.50-$1.80 vs. prior guidance of $1.40-$1.80 and $1.67 consensus.
- Sees "steady improvements" taking hold in the potash industry, and maintains its FY 2014 global potash shipments outlook of 55M-57M metric tons vs. 53.5m tons shipped in 2013.
- Reports weaker Q1 results from its nitrogen and phosphate units due to lower prices; phosphate production also was disrupted by bad weather.
Apr. 24, 2014, 6:02 AM
Apr. 15, 2014, 8:36 AM
- Potash (POT) +2.3% premarket on speculation that BHP Billiton (BHP) may make another run at acquiring the fertilizer company after failing in a prior buyout attempt in 2010, according to the Globe & Mail.
- The report says industry speculation is "intense" because "the numbers work, the personalities are closer to working, [and] even the politics are not insurmountable because the landscape has shifted," but it adds that "there is no sign that any potential deal is underway."
Apr. 7, 2014, 11:28 AM
- Wall Street reaction to the change of the guard at Potash (POT -1.6%), where longtime President and CEO Bill Doyle will step down in July after a 27-year career with the company, seems one of surprise and a bit of puzzlement.
- In the view of TD Securities analyst Greg Barnes, the fact that replacement Jochen Tilk comes from outside the fertilizer industry is a surprise, though he believes is widely respected by his peers and had a strong commitment to sustainability in the mining industry as the head man at Inmet Mining.
- According to Raymond James, Doyle's decision to step down isn't unexpected but is "a little taken aback" at the choice of Tilk "on the heels of one of the potash industry's most volatile periods."
- RBC is taking a wait-and-see approach as it learn more about how the new CEO will help shape the company's strategy to grow its earnings and navigate a challenging time in the potash market (Briefing.com).
Apr. 7, 2014, 3:42 AM
- Potash Corp. (POT) CEO Bill Doyle plans to step down in July after 15 years in the job and will be replaced by Jochen Tilk, the former head of Inmet Mining, which was acquired by First Quantum Minerals for C$4.9B last year.
- Tilk takes over amid a difficult potash market in which prices have stayed low due to years of soft demand and rising supplies.
- "Tilk is an outsider and that's going to bring with it challenges for the company and for the industry," says analyst Steve Hansen of Raymond James. (PR)
Mar. 17, 2014, 3:13 PM
- U.S. farm co-operative CHS agrees to buy 16 Canadian farm retail outlets from Agrium (AGU +0.6%) and says it plans to further expand its business in Canada.
- The deal includes eight stores that sell seed, chemicals and fertilizer to farmers, as well as eight ammonia tank businesses, located in Alberta and Saskatchewan, the two biggest wheat- and canola-growing Canadian provinces.
- Separately, AGU and fertilizer peers Potash (POT +1.1%) and Rentech Nitrogen Partners (RNF +1.4%) are upgraded to Market Perform from Underperform at Cowen on the possibility that fertilizer prices could rise; the possibility of a late start to fertilizer application, which would pressure logistics systems, may lead to even higher near-term prices, the firm says.
Mar. 5, 2014, 3:59 PM
- Potash Corp. (POT +3.9%) and other fertilizer makers rally as FT reports the two largest shareholders in Uralkali have endorsed the logic of restarting a partnership with the Belarus potash export cartel, opening the door to a deal that would end the potash war that has roiled the industry.
- No formal negotiations have occurred between the two companies about restarting their partnership, but the subject is said to have been mentioned informally.
- AGU +1.5%, MOS +1.8%, IPI +4.3%.
Mar. 3, 2014, 2:35 PM
- Potash producers are bucking the broader stock market weakness, as they stand to benefit if the Ukrainian crisis leads to economic sanctions against Russia.
- Potash is one of Russia’s important export products, Newedge's Robbert van Batenburg notes: “The erstwhile cartel between Russia and Belarus supplied 43% of total global potash demand... Non-Russian potash supplier[s] may benefit from a potential trade sanctions that could impact Russian potash exports.”
- POT +0.6%, AGU +1%, MOS +0.2%, IPI +0.5%, CF +1.7%.
Feb. 10, 2014, 10:49 AM
- Higher natural gas prices will have an outsized negative impact on Agrium (AGU) and Methanex (MEOH), CIBC says, explaining that the rising prices will squeeze margins for plants that do not have long-term gas contracts.
- Every $1/MMBtu increase in gas prices negatively impacts methanol margins by $38/metric ton, the firm says, adding that ~15% of AGU's and 22% of MEOH's gross profit could be hit by higher gas prices over the long term.
- Mosaic (MOS) and Potash (POT) are less impacted, according to CIBC.
Feb. 6, 2014, 11:56 AM
- The market seems to view DuPont (DD +1.3%) as a stodgy chemical company, but it is one of the world's biggest sellers of seeds, pesticides, fertilizers and other crop protection products; a Barron's profile says shares could climb 20% as investors start to give DuPont credit for those businesses.
- DuPont delivered better than expected Q4 earnings last week, helped by fast-growing sales in its agriculture division; the unit contributed ~40% of 2013 operating profit and is DD's fastest-growing business, with sales that could rise at a double-digit rate during the next few years.
- Compared with companies focused on agriculture chemical products, DD has been trading at a discount, at 14.2x estimated 2014 earnings; investors pay 19x-20x estimated earnings for Monsanto (MON) and Potash (POT).
Jan. 31, 2014, 1:18 PM
- "Although 2014 potash sales guidance was disappointing ... the recent upward swing in global spot potash prices, the fact that Chinese buyers have concluded H1 delivery contracts, and that the global potash market is expected to report reasonable growth this year (+3.7%) suggest that the market is stabilizing and that as buyers adjust to the new market reality, demand should accelerate," says TD analyst Greg Barnes, upgrading Potash (POT +0.5%) to Buy with $37 price target.
- Though lagged, demand does respond to price, he says, and encouraging signs thus far this year suggests demand will accelerate and a price floor has been found. His team sees Potash's 2014 potash sales coming in at the upper end of 8.2-8.6 million ton guidance.
- Yesterday's earnings coverage
Jan. 31, 2014, 10:54 AM
- Despite a potash market that remains in flux in the near term, Morningstar's Jeffrey Stafford still thinks Potash Corp's (POT -0.4%) volume is set to expand significantly over the long run as potash demand in emerging markets grows and the company fills newly installed brownfield capacity.
- The firm forecasts long-term sales volume of more than 14M metric tons/year vs. its revised 2014 forecast of ~8.4M.
- Potash prices could skyrocket if demand accelerates in China and India and supply is constrained, but the firm maintains a high uncertainty rating for POT with its wide potential sales range and high operating leverage. (Q4 earnings)
Jan. 30, 2014, 8:22 AM
- Potash (POT) -4.3% premarket after posting a 45% drop in Q4 earnings and issuing weaker than expected earnings guidance for 2014 on expectations for continued pricing pressure.
- Gross margins fell as lower prices for all three fertilizer nutrients - potash, nitrogen and phosphate - outweighed improved costs and higher sales volumes.
- In its downside guidance, POT sees Q1 EPS of $0.30-$0.35 vs. $0.46 analyst consensus, and sees FY 2014 EPS of $1.40-$1.80 vs. $2.01 consensus.
- Q4 potash sales volumes rose 13%, largely fueled by North American activity, but average potash prices fell to $282/metric ton in the quarter from $387 a year earlier; while POT near-term pressure on potash prices appears to have subsided, "its impact is expected to suppress our offshore realizations through the early part of 2014."
- Among peers: MOS -1.2%, IPI -2.1% premarket.
Jan. 30, 2014, 6:03 AM
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