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Nutrien (NTR) Gains on Higher Demand Amid Pricing Woes
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Nutrien Ltd. (NTR - Free Report) is well-positioned to capitalize on increased demand for crop nutrients through its efforts to enhance production and strategic acquisitions, amid lower prices.
The stock has lost 23.5% in the past year compared with the industry’s fall of 22.7% in the same period.
Image Source: Zacks Investment Research
Rising Fertilizer Demand Bodes Well
Nutrien is poised to benefit from the increasing demand for fertilizers driven by the robust global agriculture markets. With strong grower economics and higher crop commodity prices, the company anticipates a substantial rise in global potash demand in the latter half of 2023. The upside can be attributed to lower inventories and improved affordability for growers, primarily in Nutrien's key markets of Brazil and North America. The company expects demand to further increase in 2023 owing to higher global crop production, reduced channel inventories and the need to replenish potassium levels in the soil.
To capitalize on these favorable market conditions, Nutrien is undertaking proactive measures to enhance potash production. This strategic move is in response to the positive market fundamentals and aims to ensure that customers have an adequate supply of crop inputs to meet the needs of a growing population. The company's efforts to boost production are expected to support potash sales volumes.
Nutrien is well-positioned to leverage acquisitions, cost-efficiency initiatives and the growing adoption of its digital platform. It continues to expand its presence in Brazil through acquisitions, with a focus on strengthening its network in the country. In 2022 alone, Nutrien completed 21 retail acquisitions in Brazil, further expanding its operations.
Weakened Fertilizer Prices Impact Nutrien
Nutrien faces challenges in the form of weak fertilizer prices in the near term. Prices of phosphate and potash have declined since the second half of 2022 after reaching peak levels in the first half, influenced by factors such as the Russia-Ukraine conflict and disruptions caused by sanctions in Belarus. Global nitrogen prices have also experienced a decline since the beginning of 2023. These lower prices are expected to impact Nutrien's profitability in 2023.
NTR cut its full-year 2023 guidance for adjusted EBITDA and adjusted EPS, considering the lower benchmark fertilizer prices. The company expects adjusted EBITDA of $6.5-$8 billion for the year, down from its previous estimate of $8.4-$10 billion. The adjusted earnings per share guidance has been revised lower to $5.5-$7.5 from the earlier range of $8.45-$10.65.
The Zacks Consensus Estimate for L.B. Foster’s current-year earnings is pegged at 53 cents per share, indicating year-over-year growth of 112.5%. The company’s shares have gained around 8.8% in the past year. FSTR beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 140.5%, on average.
Koppers currently carries a Zacks Rank #1. The consensus estimate for current-year earnings for KOP is currently pegged at $4.40, suggesting a year-over-year growth of 6.3%. Koppers’ shares have rallied roughly 52.2% in the past year. KOP beat the Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 13.6%, on average.
The Zacks Consensus Estimate for ATI’s current-year earnings has been revised 3.7% upward in the past 60 days. ATI beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 13%. The company’s shares have gained 101.2% in the past year.
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Nutrien (NTR) Gains on Higher Demand Amid Pricing Woes
Nutrien Ltd. (NTR - Free Report) is well-positioned to capitalize on increased demand for crop nutrients through its efforts to enhance production and strategic acquisitions, amid lower prices.
The stock has lost 23.5% in the past year compared with the industry’s fall of 22.7% in the same period.
Image Source: Zacks Investment Research
Rising Fertilizer Demand Bodes Well
Nutrien is poised to benefit from the increasing demand for fertilizers driven by the robust global agriculture markets. With strong grower economics and higher crop commodity prices, the company anticipates a substantial rise in global potash demand in the latter half of 2023. The upside can be attributed to lower inventories and improved affordability for growers, primarily in Nutrien's key markets of Brazil and North America. The company expects demand to further increase in 2023 owing to higher global crop production, reduced channel inventories and the need to replenish potassium levels in the soil.
To capitalize on these favorable market conditions, Nutrien is undertaking proactive measures to enhance potash production. This strategic move is in response to the positive market fundamentals and aims to ensure that customers have an adequate supply of crop inputs to meet the needs of a growing population. The company's efforts to boost production are expected to support potash sales volumes.
Nutrien is well-positioned to leverage acquisitions, cost-efficiency initiatives and the growing adoption of its digital platform. It continues to expand its presence in Brazil through acquisitions, with a focus on strengthening its network in the country. In 2022 alone, Nutrien completed 21 retail acquisitions in Brazil, further expanding its operations.
Weakened Fertilizer Prices Impact Nutrien
Nutrien faces challenges in the form of weak fertilizer prices in the near term. Prices of phosphate and potash have declined since the second half of 2022 after reaching peak levels in the first half, influenced by factors such as the Russia-Ukraine conflict and disruptions caused by sanctions in Belarus. Global nitrogen prices have also experienced a decline since the beginning of 2023. These lower prices are expected to impact Nutrien's profitability in 2023.
NTR cut its full-year 2023 guidance for adjusted EBITDA and adjusted EPS, considering the lower benchmark fertilizer prices. The company expects adjusted EBITDA of $6.5-$8 billion for the year, down from its previous estimate of $8.4-$10 billion. The adjusted earnings per share guidance has been revised lower to $5.5-$7.5 from the earlier range of $8.45-$10.65.
Nutrien Ltd. Price and Consensus
Nutrien Ltd. price-consensus-chart | Nutrien Ltd. Quote
Zacks Rank & Key Picks
Nutrien currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space include L.B. Foster Company (FSTR - Free Report) , Koppers Holdings Inc. (KOP - Free Report) and ATI Inc. (ATI - Free Report) , sporting a Zacks Rank #1 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for L.B. Foster’s current-year earnings is pegged at 53 cents per share, indicating year-over-year growth of 112.5%. The company’s shares have gained around 8.8% in the past year. FSTR beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 140.5%, on average.
Koppers currently carries a Zacks Rank #1. The consensus estimate for current-year earnings for KOP is currently pegged at $4.40, suggesting a year-over-year growth of 6.3%. Koppers’ shares have rallied roughly 52.2% in the past year. KOP beat the Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 13.6%, on average.
The Zacks Consensus Estimate for ATI’s current-year earnings has been revised 3.7% upward in the past 60 days. ATI beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 13%. The company’s shares have gained 101.2% in the past year.