Unlike PotashCorp (POT), Mosaic (MOS), and CF Industries (CF), Agrium (AGU) has a large retail business, giving the company more stability in earnings. However, the stock has delivered losses of 3.5% YTD (year-to-date) as of July 13, 2017.
As we noted earlier, the anemic earnings growth for fertilizer players has dented return expectations for most of the stocks under the umbrella of the fertilizer sector (MOO).
According to a Reuters’ survey of 20 analysts, the mean rating on the stock is currently at 2.7 with an overall “hold” recommendation on the stock for the next 12 months. Out of the 20 analysts surveyed, only two had a “strong buy” and seven had a “buy” recommendation on the stock for the next 12 months. Note that one more analyst has a “buy” recommendation on the stock than last month.
The majority of analysts still have a “hold” recommendation on the stock while only one analyst had a “sell” recommendation for the next 12 months.
Similar to PotashCorp, Agrium has also lost analyst coverage compared to a year ago. As you can see in the chart above, in 2016, almost 24 analysts covered the stock—which was four more than the current number of analysts covering the stock.
As of July 13, 2017, the mean consensus target for Agrium stood at $103.2, which would deliver a 6.3% upside. However, fewer analysts are confident about this price target, which reflects in the lower consensus median price target of $99.5 in the next 12 months. This target would leave an upside of just 2.5% if the current price were to converge with analysts’ median price target over the next 12 months.