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Nutrien's (NTR) Stock Up 15% in 3 Months: What's Driving It?

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Nutrien Ltd.’s (NTR - Free Report) shares have gained 15.1% over the past three months. The company has also outperformed its industry’s rise of 13.2% over the same time frame. It has also topped the S&P 500’s roughly 6.3% decline over the same period.

Let’s dive into the factors behind this fertilizer maker’s stock price appreciation.

Zacks Investment Research
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What’s Aiding NTR?

Nutrien, currently carrying a Zacks Rank #3 (Hold), is benefiting from solid demand and higher prices for fertilizers, backed by the strength in global agriculture markets. The company is also gaining from higher net realized selling prices for crop nutrients as witnessed in the second quarter of 2022. It witnessed higher sales across all the segments in the quarter, driven by higher selling prices and strong demand.

Potash prices have been driven by robust global demand and tight supply. Tight inventory along with healthy demand is also driving phosphate prices globally. Lower global supply availability stemming from reduced operating rates, strong demand and a spike in energy prices are likely to have also boosted nitrogen prices. Supply constraints are driving ammonia and nitrate prices. Higher prices are expected to drive the company’s sales and margins for full-year 2022.

Nutrien is also taking actions to boost potash production in the wake of tightening global potash market conditions. The move is in response to strong market fundamentals and is geared to enable its customers have the crop inputs they require to feed a growing population. Its actions to boost production are supporting its potash sales volumes.

The company is also well placed to gain from acquisitions, cost efficiency, and increased adoption of its digital platform. It continues to expand its footprint in Brazil through acquisitions.

Nutrien, in July 2022, agreed to acquire Brazilian company Casa do Adubo S.A. The acquisition is in sync with Nutrien’s Retail growth strategy in Brazil. It is expected to result in additional run-rate sales of roughly $400 million and increase total Nutrien Ag Solutions annual sales in Latin America to around $2.2 billion. Nutrien expects to exceed its stated target of $100 million of adjusted EBITDA in Brazil by 2023 upon completion of the acquisition. With the acquisition, the company will have 180 commercial units in Latin America. The buyout also expands Nutrien’s footprint in Brazil from five states to 13.

Stocks to Consider

Better-ranked stocks worth considering in the basic materials space include Albemarle Corporation (ALB - Free Report) , Ryerson Holding Corporation (RYI - Free Report) and Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) .

Albemarle, currently sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 426.7% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 22.1% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 9% in a year.

Ryerson Holding, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 74.2% for the current year. The consensus estimate for RYI's earnings for the current year has been revised 3.2% upward in the past 60 days.

Ryerson Holding’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 28.9%. RYI has gained around 29% over a year.

Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 18.8% upward in the past 60 days.

Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 53% in a year. The company currently carries a Zacks Rank #2 (Buy).

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