What's Growing in Agribusiness That's Piquing Analysts' Interest?

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Part 3
What's Growing in Agribusiness That's Piquing Analysts' Interest? PART 3 OF 8

What PotashCorp’s Most Bullish Analyst Has to Say


Out of the 22 Wall Street analysts covering PotashCorp (POT), five have a “buy” recommendation on the company, 12 have a “hold” recommendation, and five have a “sell” recommendation, according to the Bloomberg consensus. Overall, more analysts have a “hold” recommendation on PotashCorp, with the next 12-month price target at $16.10 per share.

Recently, PotashCorp announced a merger of equals with Agrium (AGU) on September 12. For further details, please read PotashCorp and Agrium: Another Merger in the Agribusiness Space.

What PotashCorp&#8217;s Most Bullish Analyst Has to Say

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Out of the ten analysts in the chart above, nine have maintained their previous recommendations for Monsanto following the September 12 merger announcement. However, Stifel’s Paul Forward upgraded the stock to “buy” from “hold.”

Price targets

Overall, 22 analysts have a consensus price target of $16.10 on PotashCorp over the next 12 months. On September 23, this price target is only ~1% above its $15.95 per share at the end of the day. This is the nature of mergers of equals, in which the shares of the existing companies are exchanged with shares of the new company.

Paul Forward, who is most bullish on the company, has a price target of $20 per share. He stated, “The merger benefits both Agrium and PotashCorp shareholders, in our view, by providing Agrium shareholders with backwards integration for its growing retail network as well as leverage to a rebound in nutrient prices, which we expect are approaching trough levels, and by providing PotashCorp shareholders shelter from a difficult nutrient price environment and access to growth in the form of Agrium’s retail exposure.”

Difficult nutrient prices have negatively impacted companies in the agricultural fertilizer sector (MXI) such as CF Industries (CF), Agrium, PotashCorp, and Intrepid Potash (IPI).

In the next article, let’s see what analysts recommend for Agrium.


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