Mosaic, Nutrien income mixed; Fertilizer stocks vary

Mosaic (MOS) and fellow fertilizer maker nutrients (NTR) reported mixed results for the first quarter. But while Mosaic sees supply chain problems continuing in the second quarter, Nutrien sharply raised its full-year profit forecast. MOS stock fell slightly early on Tuesday, while NTR stock rose modestly, both from key levels.


FMC (FMC), a pesticide leader and member of the flagship IBD 50 stock list, collapsed early Tuesday after solid gains but slackened guidance.

Nitrogen fertilizer producer CF Industries (CF) has earnings at the end of Wednesday.

All four stocks are part of the Chemicals-Agricultural industry group which ranks second out of 197 IBD industry groups, based on price performance and momentum. The group was already on a boom when the Russian invasion of Ukraine sparked what appeared to be a strong rally.

Numerous forces have contributed to a rise in fertilizer prices, including restrictions on exports from Russia, Belarus and Ukraine. A spike in natural gas prices, the feedstock for nitrogen-based fertilizer and US tariffs on deliveries from Morocco also contributed.

Now fertilizer stocks are down about 15%-20% from their peaks and are seeking support from their 50-day moving averages. A strong break would be a sell signal. But a bounce could open up new buying opportunities.

So far, a number of analysts are sticking with the group as they see potential for a long earnings boom.

On Monday, Mizuho analyst Christopher Parkinson handed out big target price increases for MOS stocks (to 89 from 59), NTR (124 from 94), CF (120 from 81) and FMC (155 from 136). Parkinson sounded “a multi-year bullish call” but remained neutral as he looked for a more compelling entry.

On March 7, when CF was featured as IBD Stock Of The Day, Piper Sandler analyst Charles Neivert explained his optimistic outlook.

Despite a rare run of five great harvest years, global food insecurity is on the rise, he said. “We run like crazy to stay in place.”

But the inevitability of weaker crop yields and scarce supplies suggests higher maize prices will persist even after the conflict between Russia and Ukraine subsides, he says.

Mosaic income

estimates: Analysts expected Mosaic earnings per share to rise more than 400% to $2.40. Sales rose 78% to $4.08 billion.

Results: Mosaic earnings rose 323% to $2.41 per share. Sales were up 71% to $3.92 billion, but were below expectations due to lower shipment volume.

Early Tuesday, MOS stock fell 1.7% to 61.34, pulling back from the 50-day moving average after closing just below that key level in the previous two sessions. The company did not offer specific EPS guidelines, but said supply chain problems are “just beginning to abate.”

Still, Mosaic said it expects phosphate sales of 1.9-2.1 million tons in the second quarter versus 1.7 million in the first quarter. Potassium sales should increase to 2.4-2.6 million tons from 1.8 million in the first quarter.

Nutrient income

estimates: Nutrien’s earnings rose 850% to $2.76 per share, while revenues rose 64% to $7.62 billion.

Results: Nutrien’s earnings shot up 831% to $2.70 a share, while sales rose 64% to $7.66 billion.

Outlook: Nutrien raised its full-year earnings forecast to $16.20-$18.70, up from $10.20-$11.80 earlier and ahead of consensus estimates by just over $15. It cited higher selling prices, bigger potash volumes , higher gross margins for retail crop nutrients and crop protection products. The EPS guidelines also take into account at least $2 billion in repurchases of NTR shares.

The NTR share climbed 1.4% to 100.62 early Tuesday from the 50-day line. Shares rose 1% to 99.21 on Monday.

FMC revenue

estimates: FMC was expected to post earnings per share of $1.71, up 12%, on revenue growth of 7.5% to $1.29 billion.

Results: Earnings per share rose 23% to $1.88. Revenue grew 13% to $1.35 billion.

FMC held to its target range for full-year revenue growth in the mid-$5.25-$5.55 billion range. However, FMC lowered its EPS guideline to $6.70-$8, down 10 cents at both ends.

The company cited cost inflation, supply disruptions, foreign exchange adjustment and its decision to cease operations in Russia.

FMC shares fell 5% to 125. On Monday, shares hit support on the 50-day line.


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