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Potash Corp.'s Shares Touch Fresh 52-Week High at $19.88
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Shares of Potash Corp. touched a new 52-week high of $19.88 yesterday, before retracing to close the day at $19.32. The fertilizer giant’s shares have gained roughly 16% over the past three months. The stock has also gained around 10% over a month.
Average volume of shares traded over the last three months is roughly 7,364.7K. The stock has an estimated long-term EPS growth rate of 6.5%.
Potash Corp’s shares have gained 20% year-to-date compared with the Zacks categorized Fertilizers industry’s gain of 18.9% over the same period.
Factors to Consider
Potash Corp.’s adjusted earnings for the third quarter of 2016 topped Zacks Consensus Estimate. But lower nutrient prices hurt sales in the quarter that missed expectations.
Potash Corp. is expected to benefit from improving demand for potash. While market fundamentals have been challenging so far in 2016, the company sees an improved environment in 2017 with higher expected demand for potash across key consumer markets.
Potash Corp. saw improved demand for potash in the third quarter, partly due to settlement of contracts with customers in China and India. The company expects strong customer engagement in the fourth quarter. Strong affordability and need for significant nutrient replenishment are expected to support demand in North America through the balance of 2016.
Potash Corp. and Agrium , in Sep 2016, agreed to combine their businesses to create a fertilizer giant with a pro forma enterprise value of $36 billion. Shareholders of both companies approved the proposed merger of equals last month. The deal is expected to conclude in mid-2017, subject to customary closing conditions. The proposed merger would create the world’s largest crop nutrient supplier and the integrated company will be better placed to counter the headwinds in the crop nutrient markets.
The combined company will have the lowest-cost potash production assets and reserves in North America, a balanced portfolio of nutrients and a leading retail distribution platform. Moreover, investments in low-cost capacity are expected to improve operating costs and help the new company address increases in demand.
The integrated company is expected to generate as much as $500 million of annual operating synergies. Roughly $250 million of these synergies are expected to be achieved by the end of the first year following the completion of the transaction. The new company will also have a strong balance sheet with considerable cash flows, providing it ample flexibility to return excess capital to shareholders and invest in growth.
That said, Potash Corp. is exposed to a weak pricing environment and challenges in its nitrogen business. Weak prices may affect potash and nitrogen margins in the final quarter of 2016. Soft agricultural commodity prices continue to hurt the fertilizer industry.
Koppers has an expected earnings growth of around 62.4% for the current year. The stock sports a Zacks Rank #1.
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Potash Corp.'s Shares Touch Fresh 52-Week High at $19.88
Shares of Potash Corp. touched a new 52-week high of $19.88 yesterday, before retracing to close the day at $19.32. The fertilizer giant’s shares have gained roughly 16% over the past three months. The stock has also gained around 10% over a month.
Average volume of shares traded over the last three months is roughly 7,364.7K. The stock has an estimated long-term EPS growth rate of 6.5%.
Potash Corp’s shares have gained 20% year-to-date compared with the Zacks categorized Fertilizers industry’s gain of 18.9% over the same period.
Factors to Consider
Potash Corp.’s adjusted earnings for the third quarter of 2016 topped Zacks Consensus Estimate. But lower nutrient prices hurt sales in the quarter that missed expectations.
Potash Corp. is expected to benefit from improving demand for potash. While market fundamentals have been challenging so far in 2016, the company sees an improved environment in 2017 with higher expected demand for potash across key consumer markets.
Potash Corp. saw improved demand for potash in the third quarter, partly due to settlement of contracts with customers in China and India. The company expects strong customer engagement in the fourth quarter. Strong affordability and need for significant nutrient replenishment are expected to support demand in North America through the balance of 2016.
Potash Corp. and Agrium , in Sep 2016, agreed to combine their businesses to create a fertilizer giant with a pro forma enterprise value of $36 billion. Shareholders of both companies approved the proposed merger of equals last month. The deal is expected to conclude in mid-2017, subject to customary closing conditions. The proposed merger would create the world’s largest crop nutrient supplier and the integrated company will be better placed to counter the headwinds in the crop nutrient markets.
The combined company will have the lowest-cost potash production assets and reserves in North America, a balanced portfolio of nutrients and a leading retail distribution platform. Moreover, investments in low-cost capacity are expected to improve operating costs and help the new company address increases in demand.
The integrated company is expected to generate as much as $500 million of annual operating synergies. Roughly $250 million of these synergies are expected to be achieved by the end of the first year following the completion of the transaction. The new company will also have a strong balance sheet with considerable cash flows, providing it ample flexibility to return excess capital to shareholders and invest in growth.
That said, Potash Corp. is exposed to a weak pricing environment and challenges in its nitrogen business. Weak prices may affect potash and nitrogen margins in the final quarter of 2016. Soft agricultural commodity prices continue to hurt the fertilizer industry.
Potash Corp. is a Zacks Rank #3 (Hold) stock.
POTASH SASK Price and Consensus
POTASH SASK Price and Consensus | POTASH SASK Quote
Other Stocks to Consider
Better-ranked companies in the basic materials space include FMC Corporation (FMC - Free Report) and Koppers Holdings Inc. (KOP - Free Report) .
FMC sports a Zacks Rank #1 (Strong Buy). The company has an expected earnings growth of around 14.3% for the current year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Koppers has an expected earnings growth of around 62.4% for the current year. The stock sports a Zacks Rank #1.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>