Discussion in 'Stocks' started by NY_HOOD, Oct 2, 2008.
AGU-POT-MOS-CF-TRA all downgraded to hold from buy at merril today.
It gets old:
IT Bubble: Tech is going to change everyting, so the stock prices will never drop
Housing bubble: God doesn't make any more.... bla bla...
AG bubble: People gotta eat.....
North America ÃºD United States
Fertilizers & Agricultural Chemicals (GICS) ÃºD Commodity Agriculture (Citi
Mosaic Co (MOS)
2 October 2008 ÃºD
ÆÃ¦ Supply Discipline Â¡X MOS is curtailing phosphate production by 0.5-1.0 mln
tonnes in light of slow apparent demand and full channel inventories, with the
impact hitting mostly in F2Q. Estimates will likely be cut. Full-year phosphate
sales guidance was lowered to 8.0-9.0 mln tonnes from 9.0-9.4 mln.
ÆÃ¦ Margins Poised to Expand Further Â¡X Taking the midpoint of guidance, realized
phosphate prices should increase by 4% QoQ in F2Q to $1,050/tonne while
sulfur costs should decline beginning in Oct. Realized potash prices are
expected to increase by 21% QoQ to $590/tonne.
Opinion Â¡X Combining the macro environment and guidance cut, MOS shares
are likely to trade-off , but farmer economics indicate underlying farm
demand for fertilizers should remain strong over the full application season. In
our opinion, the market will have a difficult time focusing on the expanding
margins until phosphate prices stabilize, which is why we view the production
curtailments as a positive, since this should shorten the inventory adjustment
period and tighten the market for calendar 2009; maintaining Buy/High Risk.
Target price US$150.00
WOW, THE DOWNGRADES AFTER THE FACT...
To damn funny, I remember POT was upgraded with a price target around $300, if you are that stupid to believe that stocks was going to $300+ you were a fool, I repeated myself 1000 times that commodities and AG related stocks were in a bubble, jump to today and you have downgrades after the FACT the stocks are down over 40-50% off their highs, What a F$ckin$ joke.
Im telling you these analysts are WORTHLESS...
Do you even see how clueless they are, they upgrade the stocks at their highs and finally downgrade them after they have fallen.
HERE YOU GO:
June 20, 2008 7:35 AM EDT
Merrill Lynch boosted its price target on a number of fertilizer companies today, saying prices for nutrients will continue to rise.
Merrill Lynch raised its price target on Potash Corp. of Saskatchewan, Inc. (NYSE: POT) from $263 to $304. (Buy)
Merrill Lynch raised its price target on Agrium Inc. (NYSE: AGU) from $115 to $155. (Buy)
Merrill Lynch raised its price target on Mosaic Co. (NYSE: MOS) from $180 to $215 (Buy)
like 1974 all over again
Morgan Stanley Maintains Overweight and $155 tgt on Mosaic
Thursday, October 02, 2008
Morgan Stanley notes the "missâ relative to expectations came on the COGS line, as Mosaic's revenue came in above our expectations despite lower than anticipated volume. Not surprisingly given the widely reported $100 decline in DAP prices over the past month (i.e., trade magazines have been reporting prices around $1,00 per tonne for several weeks now), Mosaic is choosing to protect price by reducing DAP production during what it believes will be a limited period of demand softness. Morgan Stanley expects this move to shore up recent DAP price weakness and continues to note that on a go forward basis lower sulfur production costs are largely offsetting the current reduction in DAP prices. Importantly, potash results were inline with firm's expectation and the company made no alterations to its potash production expectation. Finally, given the global economic environment, what should not be lost in all of this is that Mosaic now has ~$700 million of net cash - a substantial cushion that makes it more than capable of matching supply with demand to protect price.
Given the present equity market environment, investors will likely be overly disturbed by the "miss" and cast a more skeptical eye on the production cut (i.e., will it be enough to maintain status quo DAP price levels?). That said, with Mosaic shares trading down ~20% in the post-market to $55 per share, they believe that a near-worst case scenario is now priced in for the balance of F2009.
Maintains Overweight and $155 tgt
- Citigroup maintains their Buy and $150 tgt noting that combining the macro environment and guidance cut, MOS shares are likely to trade-off today, but farmer economics indicate underlying farm demand for fertilizers should remain strong over the full application season. In firm's opinion, the market will have a difficult time focusing on the expanding margins until phosphate prices stabilize, which is why they view the production curtailments as a positive, since this should shorten the inventory adjustment period and tighten the market for calendar 2009;
Notablecalls: I think MOS represents a bounce candidate for today. Note management conf call started today at 11:00 AM ET - suspect they will do their best to soften the hit.
Looking to buy in the $56-$59 range.
Merrill Lynch downgrades the Ferts:
Cheap stocks likely to get cheaper â downgrading fertilizers We continue to believe that low global grain inventories will create a favorable multi-year demand environment for input providers and that it will take several years for significant new capacity to come on line. While the stocks remain inexpensive they appear to be driven more by price and earnings momentum than by valuation. With phosphate prices falling, nitrogen prices peaking and potash prices rising less than expected there is considerable uncertainty surrounding the near-term earnings outlook as underscored by Mosaicâs earnings miss and downward guidance. The near-term fertilizer demand outlook has become more uncertain as the recent decline in corn prices has reduced the margin advantage over less fertilizer intensive soybeans. We are reducing our ratings from Buy to Underperform on Mosaic, Potash Corp., Agrium, Intrepid, CF, and Terra.
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