Performance so far
The agricultural fertilizer industry is experiencing sluggish momentum as a result of the weakness in crop prices that has extended well into 2016. With the most recent earnings season for the quarter ended March 2016 behind us, let’s recap the industry’s performance and compare the companies within the industry (NANR).
On June 15, 2016, Terra Nitrogen (TNH) topped the industry, with its shares rising by as much as 6.1% year-to-date (or YTD).[1. January 4, 2016, was the first trading day in 2016] TNH was followed by Agrium (AGU), which returned 4.6% YTD.
Along with these two stocks, CVR Partners (UAN) has also stayed in the positive territory with a 2.3% return YTD.
Year-to-date, Intrepid Potash (IPI) has performed the worst, with the stock falling by 50.5%. Intrepid Potash is facing severe headwinds from falling potash prices, which is squeezing the company’s margins. We will cover this in more detail later in this series.
Nitrogen fertilizer producer CF Industries (CF) has lost 31.7% YTD, followed by Mosaic (MOS), which is down by 7.5% over the same period. Israel Chemicals (ICL) is down by 3.9% YTD while PotashCorp (POT) is down by 3.8% YTD.
In this series, we’ll recap the performance of these companies. We’ll look at key metrics such as shipments and average fertilizer prices, which are the key drivers of revenue for commodities companies.
We will also look at margins and earnings growth along with valuation multiples. Lastly, we will sum up this series with analysts’ ratings and next-12-month price targets for these companies.
Let’s begin with the top-line performance of these companies.