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Investing.com - RBC Capital downgraded Mosaic (NYSE:MOS), a $9.8 billion fertilizer company trading at 11.3x earnings, from Outperform to Sector Perform and lowered its price target to $30.00 from $40.00. According to InvestingPro data, three analysts have recently revised their earnings estimates downward for the upcoming period.
The downgrade follows Mosaic’s announcement of another phosphate production cut, which RBC Capital described as a surprise development that would likely cause a significant drop in share price. Despite these challenges, the company has maintained its dividend payments for 15 consecutive years.
RBC Capital expressed concerns that the phosphate operational issues might persist, noting that the company may need several quarters of strong operations to rebuild investor confidence.
Despite the downgrade, RBC Capital indicated there remains potential upside if Mosaic can return to nameplate phosphate production levels, which would allow the company to benefit from currently elevated phosphate prices.
The firm emphasized that realizing this potential upside would require "much better execution" from Mosaic going forward.
In other recent news, The Mosaic Company reported preliminary third-quarter phosphate production volumes that fell below management’s expectations, reaching approximately 1.7 million tonnes. This shortfall was due to unexpected mechanical issues at the Riverview sulfuric acid plant and utility interruptions at the Bartow facility in mid-September. Additionally, Mosaic completed the sale of its idled Patos de Minas phosphate mining unit in Brazil to Fosfatados Centro SPE Ltda. for $111 million. The company anticipates recording a book gain of $80-90 million in the fourth quarter of 2025 from this transaction. Furthermore, Mosaic has agreed to sell its Taquari-Vassouras potash mine in Brazil to VL Mineração Ltda. for up to $27 million, with the deal pending approval from the Brazilian Administrative Council for Economic Defense. In a previous quarter, Mosaic’s Q2 2025 earnings results missed expectations, with an EPS of $0.51 against a forecast of $0.72 and revenue of $3.01 billion compared to the expected $3.16 billion. The company’s stock experienced a decline following these results.
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