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Agribusiness Stocks: November Post-Earnings Update

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Part 3
Agribusiness Stocks: November Post-Earnings Update PART 3 OF 9

Agrium: Analysts’ Recommendations after Its 3Q17 Earnings

Agrium’s earnings

Recently, Agrium (AGU) reported its 3Q17 earnings. It reported an adjusted EPS (earnings per share) of -$0.23, which missed analysts’ estimate of an EPS of -$0.05. Since the company’s 3Q17 earnings release, the stock is trading slightly below the level before its earnings. The company’s poor performance was due to a longer-than-expected production outage and unfavorable weather in certain markets (XLB).

Agrium provided updates on its merger with PotashCorp (POT). To learn more, read Agrium’s 3Q17 Results Miss the Estimates.

Agrium: Analysts&#8217; Recommendations after Its 3Q17 Earnings

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Analysts’ ratings

As of November 10, the consensus mean rating of 21 analysts for Agrium stood at 2.4 with an overall recommendation of a “buy.” The rating changed from 3.0 and a “hold” in October.

Similar to PotashCorp, analysts’ recommendation didn’t change in the current month at each level. Out of the 21 analysts, two continued to have a “strong buy” recommendation and ten continued to have a “buy” recommendation on the stock for the next 12-month period.

In contrast to what we’ve seen for fertilizer stocks, fewer analysts had a “hold” recommendation on Agrium. Eight analysts continued to recommend a “hold” on the stock.

Only one analyst maintained a “sell” recommendation on Agrium. None of the analysts recommended a “strong sell” for the next 12-month period. It’s similar to what we’ll see for CF Industries (CF) later in this series.

Target price

The current consensus mean target price for Agrium stood at $112.8, which rose from $110.6 in our October update. However, the current target price fell from $115.8 before the company’s earnings release.

When we compare the target price with the November 10 market closing price of $106.8, it results in a 5.5% upside—provided that the market price converges with the target. Following Agrium’s earnings, LB Securities raised its target price to $125 from $120.

In the next part, we’ll discuss analysts’ ratings for Mosaic (MOS).

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