Dahlman Rose Downgrades CVR Partners (UAN) to Sell; Large Corn Crop Spells Pricing Reduction and Trouble for Fertilizers

May 9, 2012 9:06 AM EDT
Get Alerts UAN Hot Sheet
Price: $6.46 +5.04%

Rating Summary:
    2 Buy, 4 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Dahlman Rose downgraded CVR Partners (NYSE: UAN) from Hold to Sell with a price target of $22.00.

Analyst, Charles Neivert, said, "In our view, the potential for an exceptional corn crop under a variety of acreage and yield scenarios, counters almost all of the bullish theses for fertilizer shares. As such, we are downgrading the shares of both CF Industries (NYSE: CF) and UAN to Sell from Hold and the shares of Rentech Nitrogen (NYSE: RNF) to Hold from Buy. We believe that the WASDE report will be a catalyst for a reassessment of fertilizer shares. The forecast of a large carryout could prove to be very destructive for corn prices and, subsequently, fertilizer shares. We are struck by the range of scenarios with outcomes that could not only drive corn below $5/bushel, but even $4/bushel in the more bearish cases."

For an analyst ratings summary and ratings history on CVR Partners click here. For more ratings news on CVR Partners click here.

Shares of CVR Partners closed at $25.43 yesterday.

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