Yossarian21

What's in Store for the Fertilizer Industry?

The other reason might be that the stock price is already accounting for net profits that are impossible to generate even at higher margin for the fertilizer companies. As an investor, the question in my mind would be at what multiple should the fertilizer stocks trade?

Their P/E (as on bberg) is about 49 and 44 respectively while the Est 1Year P/E is 13 and 10. If that is any indication the street is expecting a 4x increase in EPS number from these companies.

There is no major volume expansion coming on-line in 2008 or 2009 so that means that 4x EPS increase should come from margin expansions. Seems too aggressive.