Credit Suisse Downgrades Agrium (AGU) to Neutral; Headwinds Persist
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Credit Suisse downgraded Agrium (NYSE: AGU) from Outperform to Neutral with a price target of $88.00. The analyst notes the company is making the best of a bad situation but headwinds persist.
Analyst C. Parkinson commented, "Following weaker-than-expected 3Q earnings, we are adjusting our numbers to reflect persistent headwinds in the Wholesale segment and a slight moderation in Retail driven by our expectation that corn acres will likely fall to ~90mm in 2017 (vs. ~94.5mm in '16); a slight rise in high value cotton acres will be a minor offset. Weather issues in Canada are also presenting NT challenges in both key segments and may deprive AGU of some business in nutrients and crop protection. We are lowering our 2016 EPS to $4.95 from $5.02 and also We adjust our '17/'18 estimates to $5.45 (from $5.60) and $6.10 (from $6.25), respectively. While we maintain a favorable view of AGU relative to other fertilizer names, we believe this is fully priced at current levels. We thus adjust our rating to Neutral (from Outperform); our TP is $88."
Shares of Agrium closed at $90.25 yesterday.
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