Nutrien Ltd.’s (NTR Quick QuoteNTR - Free Report) shares have popped 23.7% over the past three months. The company has also outperformed the Zacks Fertilizers industry’s 17.5% rise over the same time frame. NTR has also topped the S&P 500’s roughly 8% increase over the same period.

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Let’s take a look into the factors that are driving this fertilizer maker.

Healthy Demand, Acquisitions & Cost Cuts Aid NTR Stock

Nutrien is well-positioned to capitalize on rising fertilizer demand, which is being driven by solid global agricultural markets. The company is seeing high fertilizer demand in its core regions. Crop commodity prices are expected to remain elevated until 2025 due to anticipated constrained inventory levels.

Global demand for potash is predicted to increase due to improved farmer economics, increased affordability and low inventory levels. Similarly, the phosphate market benefits from increased global demand combined with low inventories among producers and distributors. Nitrogen fertilizer demand is strong in key economies, driven by consumption in North America, India and Brazil. A recovery in industrial nitrogen demand is also aiding it. Nutrien forecasts increased corn acreage in the United States for 2025, as well as strong demand for crop inputs in the first half of the year.

The company is also expected to gain from its acquisition strategy and increased usage of its digital platform. Nutrien continues to expand its presence in Brazil through acquisitions, and it intends to seek focused opportunities within its key markets. A portion of its free cash flow is set aside for incremental growth expenditures, including targeted retail acquisitions in 2025.

Initiatives to improve operational efficiency and reduce costs are likely to boost the company's performance even further. Nutrien remains committed to reducing production costs in its potash operations. The corporation has launched a number of strategic initiatives aimed at reducing controllable costs and enhancing free cash flow. Accelerated efforts to improve operational efficiency and reduce costs are expected to result in overall savings of nearly $200 million by 2025.

Nutrien's earnings estimates have risen over the past month. The Zacks Consensus Estimate for 2025 earnings has been raised 6.2% during the same period. Estimates for the second quarter have been revised 3% higher.

NTR’s Rank & Key Picks

NTR currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the basic materials space include Carpenter Technology Corporation (CRS Quick QuoteCRS - Free Report) , Hawkins Inc. (HWKN Quick QuoteHWKN - Free Report) and ATI Inc. (ATI Quick QuoteATI - Free Report) .

Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 11.1%. The company's shares have soared 132.3% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.

Hawkins, which currently carries a Zacks Rank #2 (Buy), beat the consensus estimate in one of the trailing four quarters while missing thrice. In this time frame, it delivered an earnings surprise of roughly 8.2%, on average. The company's shares have rallied 52.9% in the past year.

ATI, which currently carries a Zacks Rank #2, beat the consensus estimate in three of the trailing four quarters while missing once. In this time frame, it delivered an earnings surprise of roughly 12.5%, on average. The company's shares have rallied 41.6% in the past year.