Intrepid Potash (IPI) is in a tricky position, with potash prices showing slower-than-expected upward movement. Intrepid’s peer PotashCorp (POT) dominates the market with its low-cost operations and is set to gain cost advantages through synergies from its merger with Agrium (AGU).
Together with Mosaic (MOS), these two companies comprise Canpotex, a marketing consortium, to reach international markets. This consortium leaves Intrepid Potash out in the cold.
On March 13, 2017, none of the five analysts covering Intrepid Potash (IPI) gave the stock a “buy” recommendation over the next 12 months. Compare this to one analyst with a “buy” recommendation in our February update. Three analysts gave a “hold” recommendation, and two gave a “sell” recommendation on the stock.
Since our last update in February, Wall Street analysts have maintained a price target of $2.00 for Intrepid Potash for the next 12 months. On March 13, 2017, the stock closed at $1.58, which was trading at a 21% discount to the analysts’ consensus price target.
Compared to the other fertilizer players (SOIL)—PotashCorp, Agrium, CF Industries, and Mosaic—Intrepid Potash is now the worst performer this year.
Next, let’s look at analysts’ recommendations and their price target for Monsanto (MON).