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RBC Cuts Potash (POT) Price Target to $120 Following K+S Demand Concerns

June 17, 2009 5:01 PM EDT
POT Hot Sheet
Rating Summary:
    16 Buy, 5 Hold, 2 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 16 | Down: 7 | New: 23
Earlier, analysts at RBC Capital lowered their price target on shares of Potash (NYSE: POT) from $150 to $120 following concerning comments this morning from Germany's K+S. Despite the target reduction, RBC maintained an Outperform rating on Potash.

With shares of closing down nearly 11% to $95.59 today, the firm's price target represents potential upside of about 25.5%.

Ag and potash stocks tumbled today on the news that K+S sees very weak potash demand during 2009. Consequently, K+S lowered its potash demand estimates from about 6 million to 4-4.5 million tonnes, also suggesting that it has seen "severe price weakness and unsustainability for large quantity pricing".

The Market Vectors Agribusiness ETF (NYSE: MOO), commonly referred to as "the MOO", fell 3.7% on the overseas news today. Elsewhere in the sector: Mosaic (NYSE: MOS) fell 9.7%, Agrium (NYSE: AGU) tumbled 7%, CF Industries (NYSE: CF) dipped 5.4% and Interpid Potash (NYSE: IPI) fell 9%.

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