We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
3 Fertilizer Stocks to Keep an Eye on Amid Industry Headwinds
Read MoreHide Full Article
The Zacks Fertilizers industry continues to face headwinds from elevated costs for key raw materials, partly due to war-related disruptions, putting pressure on industry players’ margins. Elevated fertilizer prices and higher input costs could also prompt growers to reduce application rates due to affordability issues, potentially weighing on fertilizer demand.
However, increased fertilizer prices augur well for the companies in this space. Fertilizer players such as Nutrien Ltd. (NTR - Free Report) , ICL Group Ltd (ICL - Free Report) and Intrepid Potash, Inc. (IPI - Free Report) are worth a look, notwithstanding the near-term headwinds.
About the Industry
The Zacks Fertilizers industry comprises producers, distributors and marketers of crop nutrients for the global agriculture industry. Companies in this space offer nutrients such as phosphates (including diammonium phosphate, monoammonium phosphate and phosphoric acid), potash and nitrogen (including urea, ammonia and urea ammonium nitrate) fertilizers. They also provide other nitrogen products to help farmers maximize crop yield. Crop nutrients are essential to drive agricultural productivity and boost the natural fertility of the soil. Demand for these nutrients is being supported by the need to increase the production of grains to address rising food consumption globally. Moreover, the constant need of growers to nourish their crops, replenish nutrients in the soil following a harvest and boost yields to feed a growing global population drives the consumption of fertilizers.
What's Shaping the Future of the Fertilizers Industry?
Elevated Input Costs a Concern: Increased prices of major raw materials pose a headwind to fertilizer companies. Prices of both sulfur and ammonia — key inputs for the production of phosphate — remain elevated. Supply disruptions from Russia amid the war with Ukraine, aggravated by the Middle East conflict, contributed to the rise in prices of both sulfur and ammonia. Plant shutdowns and maintenance also led to a tight supply of these raw materials, which, coupled with strong demand, pushed up their prices. Rising natural gas prices, a key feedstock for nitrogen fertilizer, are also a concern. Natural gas prices have shot up in Europe and Asia due to constrained supply availability. Higher raw material costs have led to an increase in production costs. As such, fertilizer makers are likely to face short-term margin pressure associated with higher input costs.
Reduced Affordability May Dampen Fertilizer Demand: Growers face challenges from still-depressed crop commodity prices and elevated production costs triggered by increased fertilizer prices, higher input and other costs, including fuel. Escalating costs are likely to result in farmers reducing fertilizer applications or switching to less fertilizer-intensive crops, leading to softer demand. Farm income is also projected to decline this year. The U.S. Department of Agriculture expects net farm income to decline 2.6% year over year to $158.4 billion this year. The same is forecast to decline 5.5% after adjusting for inflation. Reduced farm income may lead to a cutback in fertilizer application. Meanwhile, prices of major crops such as corn, soybean and wheat have improved this year from the lows witnessed in recent years, partly due to the Middle East tensions, but they remain well below the multi-year highs reached in 2022.
Higher Fertilizer Prices Augur Well: Prices of phosphate, potash and nitrogen remained depressed in 2023 and 2024 amid oversupply in the market and weak demand, weighing on the profitability of fertilizer companies. On a positive note, strong demand and supply tightness led to an uptick in fertilizer prices in 2025, with phosphate prices seeing a notable increase. Prices were driven by solid agricultural demand in major markets, China’s export restrictions, U.S. tariffs and higher input costs. The upward momentum in fertilizer prices continues this year. Higher prices are expected to drive top-line and margin expansion for companies in this space over the near term.
Zacks Industry Rank Reflects Bleak Prospects
The Zacks Fertilizers industry is part of the broader Zacks Basic Materials sector. It carries a Zacks Industry Rank #226, which places it in the bottom 9% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates a gloomy near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock market performance and valuation picture.
Industry Underperforms S&P 500
The Zacks Fertilizers industry has underperformed the Zacks S&P 500 composite and the broader Zacks Basic Materials sector over the past year.
The industry has lost 47.3% over this period compared with the S&P 500’s 15.3% rise and the broader sector’s 14.3% increase.
One-Year Price Performance
Industry's Current Valuation
On the basis of the trailing 12-month enterprise value-to EBITDA (EV/EBITDA) ratio, which is a commonly used multiple for valuing fertilizer stocks, the industry is currently trading at 13.99X compared with the S&P 500’s 19.71X and the sector’s 14.57X.
In the past five years, the industry has traded as high as 15.68X and as low as 4.75X, with a median of 12.17X, as the chart below shows.
Enterprise Value/EBITDA (EV/EBITDA) Ratio
Enterprise Value/EBITDA (EV/EBITDA) Ratio
3 Fertilizer Stocks to Keep a Close Eye on
ICL Group: Israel-based ICL, which is engaged in the fertilizer and specialty chemical sectors, remains focused on growing its specialties businesses. It focuses on boosting operating efficiency and productivity, expanding customer agreements, growing through strategic acquisitions and launching innovative solutions. ICL’s cost-saving and efficiency efforts are driving margin expansion. ICL has a healthy balance sheet and generates substantial cash flows, which allows it to drive shareholder value and fund growth initiatives.
ICL Group currently carries a Zacks Rank #2 (Buy). ICL has a projected earnings growth rate of 22.2% for 2026. ICL surpassed the Zacks Consensus Estimate in three of the trailing four quarters. It has a trailing four-quarter earnings surprise of 7.6%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price and Consensus: ICL
Nutrien: Canada-based Nutrien is a leading provider of crop inputs and services. The company is benefiting from healthy demand for crop nutrients, backed by supportive global agriculture markets. NTR is seeing strong potash sales volumes and increasing production from its low-cost North American operations to meet rising demand. NTR is also gaining from acquisitions, cost efficiency and increased adoption of its digital platform. The company also continues to expand its footprint in Brazil through acquisitions. Cost and operational efficiency initiatives are also expected to aid its performance. The company has announced several strategic actions to reduce its controllable costs and boost free cash flow.
Nutrien has expected earnings growth of 9.2% for 2026. It also has an expected long-term earnings per share growth rate of 20%. NTR currently carries a Zacks Rank #3 (Hold).
Price and Consensus: NTR
Intrepid Potash: Based in Colorado, Intrepid Potash is the only producer of muriate of potash in the United States and makes a specialty fertilizer, Trio. It is benefiting from favorable market conditions, stable volumes for Trio, improved mine efficiency and pricing strength. Higher production and increased prices are also supporting its potash business. Higher realized prices for Trio and potash are driving margins. The company also remains focused on executing its capital projects, which are expected to boost its production.
Intrepid Potash currently carries a Zacks Rank #3. IPI has a projected earnings growth rate of 22.9% for 2026. The Zacks Consensus Estimate for 2026 earnings for IPI has been revised 9.3% higher over the past 60 days.
View the Zacks #1 Rank List
Image: Bigstock
3 Fertilizer Stocks to Keep an Eye on Amid Industry Headwinds
The Zacks Fertilizers industry continues to face headwinds from elevated costs for key raw materials, partly due to war-related disruptions, putting pressure on industry players’ margins. Elevated fertilizer prices and higher input costs could also prompt growers to reduce application rates due to affordability issues, potentially weighing on fertilizer demand.
However, increased fertilizer prices augur well for the companies in this space. Fertilizer players such as Nutrien Ltd. (NTR - Free Report) , ICL Group Ltd (ICL - Free Report) and Intrepid Potash, Inc. (IPI - Free Report) are worth a look, notwithstanding the near-term headwinds.
About the Industry
The Zacks Fertilizers industry comprises producers, distributors and marketers of crop nutrients for the global agriculture industry. Companies in this space offer nutrients such as phosphates (including diammonium phosphate, monoammonium phosphate and phosphoric acid), potash and nitrogen (including urea, ammonia and urea ammonium nitrate) fertilizers. They also provide other nitrogen products to help farmers maximize crop yield. Crop nutrients are essential to drive agricultural productivity and boost the natural fertility of the soil. Demand for these nutrients is being supported by the need to increase the production of grains to address rising food consumption globally. Moreover, the constant need of growers to nourish their crops, replenish nutrients in the soil following a harvest and boost yields to feed a growing global population drives the consumption of fertilizers.
What's Shaping the Future of the Fertilizers Industry?
Elevated Input Costs a Concern: Increased prices of major raw materials pose a headwind to fertilizer companies. Prices of both sulfur and ammonia — key inputs for the production of phosphate — remain elevated. Supply disruptions from Russia amid the war with Ukraine, aggravated by the Middle East conflict, contributed to the rise in prices of both sulfur and ammonia. Plant shutdowns and maintenance also led to a tight supply of these raw materials, which, coupled with strong demand, pushed up their prices. Rising natural gas prices, a key feedstock for nitrogen fertilizer, are also a concern. Natural gas prices have shot up in Europe and Asia due to constrained supply availability. Higher raw material costs have led to an increase in production costs. As such, fertilizer makers are likely to face short-term margin pressure associated with higher input costs.
Reduced Affordability May Dampen Fertilizer Demand: Growers face challenges from still-depressed crop commodity prices and elevated production costs triggered by increased fertilizer prices, higher input and other costs, including fuel. Escalating costs are likely to result in farmers reducing fertilizer applications or switching to less fertilizer-intensive crops, leading to softer demand. Farm income is also projected to decline this year. The U.S. Department of Agriculture expects net farm income to decline 2.6% year over year to $158.4 billion this year. The same is forecast to decline 5.5% after adjusting for inflation. Reduced farm income may lead to a cutback in fertilizer application. Meanwhile, prices of major crops such as corn, soybean and wheat have improved this year from the lows witnessed in recent years, partly due to the Middle East tensions, but they remain well below the multi-year highs reached in 2022.
Higher Fertilizer Prices Augur Well: Prices of phosphate, potash and nitrogen remained depressed in 2023 and 2024 amid oversupply in the market and weak demand, weighing on the profitability of fertilizer companies. On a positive note, strong demand and supply tightness led to an uptick in fertilizer prices in 2025, with phosphate prices seeing a notable increase. Prices were driven by solid agricultural demand in major markets, China’s export restrictions, U.S. tariffs and higher input costs. The upward momentum in fertilizer prices continues this year. Higher prices are expected to drive top-line and margin expansion for companies in this space over the near term.
Zacks Industry Rank Reflects Bleak Prospects
The Zacks Fertilizers industry is part of the broader Zacks Basic Materials sector. It carries a Zacks Industry Rank #226, which places it in the bottom 9% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates a gloomy near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock market performance and valuation picture.
Industry Underperforms S&P 500
The Zacks Fertilizers industry has underperformed the Zacks S&P 500 composite and the broader Zacks Basic Materials sector over the past year.
The industry has lost 47.3% over this period compared with the S&P 500’s 15.3% rise and the broader sector’s 14.3% increase.
One-Year Price Performance
Industry's Current Valuation
On the basis of the trailing 12-month enterprise value-to EBITDA (EV/EBITDA) ratio, which is a commonly used multiple for valuing fertilizer stocks, the industry is currently trading at 13.99X compared with the S&P 500’s 19.71X and the sector’s 14.57X.
In the past five years, the industry has traded as high as 15.68X and as low as 4.75X, with a median of 12.17X, as the chart below shows.
Enterprise Value/EBITDA (EV/EBITDA) Ratio
Enterprise Value/EBITDA (EV/EBITDA) Ratio
.jpg)
3 Fertilizer Stocks to Keep a Close Eye on
ICL Group: Israel-based ICL, which is engaged in the fertilizer and specialty chemical sectors, remains focused on growing its specialties businesses. It focuses on boosting operating efficiency and productivity, expanding customer agreements, growing through strategic acquisitions and launching innovative solutions. ICL’s cost-saving and efficiency efforts are driving margin expansion. ICL has a healthy balance sheet and generates substantial cash flows, which allows it to drive shareholder value and fund growth initiatives.
ICL Group currently carries a Zacks Rank #2 (Buy). ICL has a projected earnings growth rate of 22.2% for 2026. ICL surpassed the Zacks Consensus Estimate in three of the trailing four quarters. It has a trailing four-quarter earnings surprise of 7.6%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price and Consensus: ICL
Nutrien: Canada-based Nutrien is a leading provider of crop inputs and services. The company is benefiting from healthy demand for crop nutrients, backed by supportive global agriculture markets. NTR is seeing strong potash sales volumes and increasing production from its low-cost North American operations to meet rising demand. NTR is also gaining from acquisitions, cost efficiency and increased adoption of its digital platform. The company also continues to expand its footprint in Brazil through acquisitions. Cost and operational efficiency initiatives are also expected to aid its performance. The company has announced several strategic actions to reduce its controllable costs and boost free cash flow.
Nutrien has expected earnings growth of 9.2% for 2026. It also has an expected long-term earnings per share growth rate of 20%. NTR currently carries a Zacks Rank #3 (Hold).
Price and Consensus: NTR
Intrepid Potash: Based in Colorado, Intrepid Potash is the only producer of muriate of potash in the United States and makes a specialty fertilizer, Trio. It is benefiting from favorable market conditions, stable volumes for Trio, improved mine efficiency and pricing strength. Higher production and increased prices are also supporting its potash business. Higher realized prices for Trio and potash are driving margins. The company also remains focused on executing its capital projects, which are expected to boost its production.
Intrepid Potash currently carries a Zacks Rank #3. IPI has a projected earnings growth rate of 22.9% for 2026. The Zacks Consensus Estimate for 2026 earnings for IPI has been revised 9.3% higher over the past 60 days.
Price and Consensus: IPI
.jpg)