Potash a Hold at Current Price

Potash Corp. (POT - Analyst Report), the world's leading producer of potash and the largest fertilizer producer, has benefited from higher fertilizer application rates, higher crop plantings and increasing demand for biofuels. Rising fertilizer prices, especially potash, boosted Potash Corp's earnings in 2008.

The company's manufacturing plants are located in low-cost areas and its financials are solid. However, the global economic crisis and weakened demand are matters of concern. These force us to maintain our Hold rating of the stock.

Currently, the stock is trading at 7.3x our 2009 estimate of $11.52. Thus, we set a target price of $85.00. This is 7.4x our 2009 estimate.