EU and US could reach trade deal this weekend - Reuters
On Monday, BMO Capital Markets maintained a positive stance on Mosaic Company (NYSE:MOS) stock, reiterating an Outperform rating and a $44.00 price target. The firm’s analyst expressed the belief that the recent sell-off following the company’s post-fourth-quarter earnings was excessive. Currently trading at $24.33, near its 52-week low of $23.05, InvestingPro analysis suggests the stock is undervalued compared to its Fair Value. Although there were some concerns, such as the unchanged capital expenditures for 2025 and the delay in achieving a 2 million ton per quarter phosphate run-rate from the first to the second quarter, the overall outlook remained optimistic.
The analyst cited several factors for the positive rating, including the improving potash market conditions and the continued strength in the phosphate market. These elements are expected to contribute to better performance for Mosaic in 2025, with InvestingPro data showing revenue growth forecast of 12% for FY2025. Additionally, the Fertilizantes segment is anticipated to yield better results, supported by three analysts recently revising their earnings estimates upward.
Despite the slight reduction in the estimated phosphate earnings for 2025, BMO Capital’s analysis suggests that the current valuation of Mosaic stock is attractive. The firm’s target price of $44.00 is based on an estimated 7.5 times the 2025 expected enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) ratio.
The analyst’s commentary highlighted that while not all recent developments were favorable, the positive aspects, particularly in market conditions and expected operations, provide a basis for maintaining a constructive view on the stock. The reiterated Outperform rating and price target reflect BMO Capital’s confidence in Mosaic’s potential for growth and value creation.
In other recent news, Mosaic Company reported its Q4 2024 financial results, revealing an earnings per share (EPS) of $0.45, which was below the anticipated $0.61. Revenue also fell short of expectations, totaling $2.82 billion compared to the forecasted $2.92 billion. The company’s performance was notably affected by foreign exchange losses and disruptions in phosphate production due to hurricanes in Florida. Despite these challenges, Mosaic maintains a positive outlook for 2025, driven by strong agricultural fundamentals and planned capacity expansions.
JPMorgan recently upgraded Mosaic’s stock rating from Neutral to Overweight and raised the price target to $29, citing higher expected fertilizer prices and potential sales volume expansion. Conversely, Scotiabank (TSX:BNS) and Mizuho (NYSE:MFG) Securities adjusted their price targets for Mosaic, reducing them to $31 and $28, respectively, while maintaining a Sector Outperform and Neutral rating. Both firms highlighted challenges such as disruptions in production and the need for Mosaic to improve its portfolio performance and free cash flow conversion.
Mosaic’s management expressed optimism about covering dividends and capital expenditures with operating cash flow, despite current setbacks. The company is also pursuing strategic alternatives for its potash mine in Carlsbad, New Mexico, and exploring potential monetization of its holdings in Ma’aden shares. These recent developments indicate a mixed but cautiously optimistic outlook for Mosaic, with analysts and the company focusing on overcoming operational challenges and capitalizing on favorable market conditions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.