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On Monday, Mizuho (NYSE:MFG) Securities adjusted its financial outlook for Mosaic Company (NYSE:MOS), a leading producer of phosphate and potash fertilizers with a market capitalization of $11 billion. The stock, which has delivered an impressive 43.7% return year-to-date, currently trades at $34.8. Analyst Edlain Rodriguez at Mizuho increased the price target for Mosaic shares to $35, up from the previous $32, while maintaining a Neutral rating on the stock.
The revision follows Mosaic’s announcement that it has lowered its phosphate volume forecast for the second quarter to 1.5-1.6 million tons, down from the previously projected range of 1.7-1.9 million tons. The company has also revised its full-year volume outlook to 7.0-7.3 million tons, a decrease from the initial estimate of 7.2-7.8 million tons. According to InvestingPro data, five analysts have recently revised their earnings estimates downward for the upcoming period, reflecting these operational challenges.
Mosaic attributed the reduced volume forecasts to operational challenges, including the longer-than-anticipated commissioning and ramp-up of the first three new gypsum systems at the New Wales facility. Additionally, planned downtime and maintenance activities at the New Wales, Florida, and Louisiana facilities have resulted in production levels falling short of expectations.
Despite these setbacks, Mosaic’s management remains optimistic about production improvements in the second half of the year. The company anticipates operating rates to reach the target run rate of 8 million tons across its entire U.S. phosphate asset portfolio.
In light of these updates, Mizuho has modified its earnings per share (EPS) estimates for Mosaic for the years 2025, 2026, and 2027. The new EPS forecasts are set at $2.75 for both 2025 and 2026, with a slight decrease to $2.50 for 2027. These figures have been adjusted from the previous estimates of $2.50 for 2025, $2.40 for 2026, and $2.40 for 2027.
The price target increase reflects Mizuho’s assessment of the situation, taking into account the balance of lower volume projections against prices that are tracking higher than initially expected. Despite the revised price target, Mizuho’s stance on Mosaic stock remains Neutral.
In other recent news, The Mosaic Company has reported its first-quarter 2025 earnings, surpassing earnings per share (EPS) expectations with an EPS of $0.49, compared to the forecast of $0.4622. However, the company’s revenue fell short, totaling $2.62 billion against an anticipated $2.71 billion. Mosaic has also updated its financial outlook, highlighting increased phosphate prices, with diammonium phosphate (DAP) now expected to range from $650 to $670 per tonne, reflecting strong market conditions. Despite this, the company has revised its second-quarter phosphate sales volumes downward to 1.5-1.6 million tonnes from a previous estimate of 1.7-1.9 million tonnes.
Additionally, Mosaic’s potash sales volumes for the second quarter remain steady at 2.3-2.5 million tonnes, with full-year production guidance unchanged. In another development, RBC Capital has upgraded Mosaic’s stock rating from Sector Perform to Outperform, raising the price target from $30.00 to $40.00, citing tightness in phosphate markets and attractive valuation. Meanwhile, Mosaic’s CEO, Bruce M. Bodine, has sold 180,708 shares of the company’s stock as part of a divorce settlement. The company remains optimistic about its production plans for the second half of the year, aiming to achieve an 8 million tonne target run rate across its U.S. phosphate assets.
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