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Here's Why You Should Retain Nutrien (NTR) in Your Portfolio
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Nutrien Ltd. (NTR - Free Report) is expected to benefit from higher demand for crop nutrients, its actions to reduce costs and strategic acquisitions amid headwinds from lower fertilizer prices.
The company’s shares are down 21.3% over a year, compared with a 21.3% decline recorded by its industry.
Image Source: Zacks Investment Research
Let’s find out why this Zacks Rank #3 (Hold) stock is worth retaining at the moment.
Healthy Demand, Acquisitions and Cost Cuts Aid NTR
Nutrien is gaining from increased demand for fertilizers, backed by the strength in global agriculture markets. It is seeing strong demand in its major markets, particularly North America.
Potash demand is being driven by strong grower economics, improved affordability and low inventory levels. The phosphate market is also benefiting from higher global demand and low producer and channel inventories. Demand for nitrogen fertilizer also remains healthy in major markets. Global nitrogen requirement is being driven by demand in North America, India and Brazil.
NTR saw higher North American sales volumes in the fourth quarter of 2023 due to lower channel inventory and increased grower demand. It sees volumes to rise in North America in the first quarter of 2024 from the prior year’s levels due to robust customer engagement. The company also expects to deliver higher fertilizer sales volumes and retail earnings in 2024, aided by increased crop input market stability and demand.
Moreover, cost and operational efficiency initiatives are expected to aid NTR’s performance. It remains focused on lowering the cost of production in the potash business. The company has also announced a number of strategic actions to reduce its controllable costs and boost free cash flow. Lower natural gas costs are also contributing to a decline in its cost of goods sold.
The company continues to expand its footprint through acquisitions. It completed a number of acquisitions in 2023 and expects to continue pursuing targeted opportunities in its core markets this year. NTR should also gain from increased adoption of its digital platform.
Softer Fertilizer Prices a Concern
Weaker fertilizer prices are likely to weigh on Nutrien’s performance. Prices of phosphate and potash have retreated since the second half of 2022 from their peak levels attained in the first half riding on the impacts of the Russia-Ukraine war and disruptions due to the sanctions in Belarus. Global nitrogen prices have declined since the beginning of 2023 driven by a rise in global supply availability. NTR’s financial performance was impacted by lower net realized selling prices across all business segments in the fourth quarter. Lower prices are expected to continue to impact its profitability over the near term.
Better-ranked stocks worth a look in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , Denison Mines Corp. (DNN - Free Report) and Innospec Inc. (IOSP - Free Report) .
The Zacks Consensus Estimate for Carpenter Technology’s current fiscal year earnings is pegged at $3.94, indicating a year-over-year surge of 245.6%. CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have gained around 77% in the past year. CRS currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Denison Mines carries a Zacks Rank #1. DNN beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 300%. The company’s shares have soared roughly 120% in the past year.
The consensus estimate for Innospec’s current-year earnings is pegged at $6.72 per share, indicating a 10.3% year-over-year rise. IOSP, carrying a Zacks Rank #2 (Buy), beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 10.5%. The company’s shares have gained 23% in the past year.
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Here's Why You Should Retain Nutrien (NTR) in Your Portfolio
Nutrien Ltd. (NTR - Free Report) is expected to benefit from higher demand for crop nutrients, its actions to reduce costs and strategic acquisitions amid headwinds from lower fertilizer prices.
The company’s shares are down 21.3% over a year, compared with a 21.3% decline recorded by its industry.
Image Source: Zacks Investment Research
Let’s find out why this Zacks Rank #3 (Hold) stock is worth retaining at the moment.
Healthy Demand, Acquisitions and Cost Cuts Aid NTR
Nutrien is gaining from increased demand for fertilizers, backed by the strength in global agriculture markets. It is seeing strong demand in its major markets, particularly North America.
Potash demand is being driven by strong grower economics, improved affordability and low inventory levels. The phosphate market is also benefiting from higher global demand and low producer and channel inventories. Demand for nitrogen fertilizer also remains healthy in major markets. Global nitrogen requirement is being driven by demand in North America, India and Brazil.
NTR saw higher North American sales volumes in the fourth quarter of 2023 due to lower channel inventory and increased grower demand. It sees volumes to rise in North America in the first quarter of 2024 from the prior year’s levels due to robust customer engagement. The company also expects to deliver higher fertilizer sales volumes and retail earnings in 2024, aided by increased crop input market stability and demand.
Moreover, cost and operational efficiency initiatives are expected to aid NTR’s performance. It remains focused on lowering the cost of production in the potash business. The company has also announced a number of strategic actions to reduce its controllable costs and boost free cash flow. Lower natural gas costs are also contributing to a decline in its cost of goods sold.
The company continues to expand its footprint through acquisitions. It completed a number of acquisitions in 2023 and expects to continue pursuing targeted opportunities in its core markets this year. NTR should also gain from increased adoption of its digital platform.
Softer Fertilizer Prices a Concern
Weaker fertilizer prices are likely to weigh on Nutrien’s performance. Prices of phosphate and potash have retreated since the second half of 2022 from their peak levels attained in the first half riding on the impacts of the Russia-Ukraine war and disruptions due to the sanctions in Belarus. Global nitrogen prices have declined since the beginning of 2023 driven by a rise in global supply availability. NTR’s financial performance was impacted by lower net realized selling prices across all business segments in the fourth quarter. Lower prices are expected to continue to impact its profitability over the near term.
Nutrien Ltd. Price and Consensus
Nutrien Ltd. price-consensus-chart | Nutrien Ltd. Quote
Stocks to Consider
Better-ranked stocks worth a look in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , Denison Mines Corp. (DNN - Free Report) and Innospec Inc. (IOSP - Free Report) .
The Zacks Consensus Estimate for Carpenter Technology’s current fiscal year earnings is pegged at $3.94, indicating a year-over-year surge of 245.6%. CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have gained around 77% in the past year. CRS currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Denison Mines carries a Zacks Rank #1. DNN beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 300%. The company’s shares have soared roughly 120% in the past year.
The consensus estimate for Innospec’s current-year earnings is pegged at $6.72 per share, indicating a 10.3% year-over-year rise. IOSP, carrying a Zacks Rank #2 (Buy), beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 10.5%. The company’s shares have gained 23% in the past year.