Citi Initiates Coverage on Mosaic (MOS) with a Hold
MOS Hot Sheet
Rating Summary:12 Buy, 6 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23
Citi initiates coverage on Mosaic (NYSE: MOS) with a Hold rating and $39 price target.
Citi analyst says, "Mosaic is the largest phosphate player in the world, but also has a sizable potash business. It exited its nitrogen business through the recent divestiture of Saskferco for $1.6B; Mosaic received $800 mm for its 50% stake in Saskferco. We expect some of US farmers to go on a “fertilizer holiday” in 2009, and as a result, we expect Mosaic's phosphate volumes down 26% and potash down 19%. With falling phosphate prices, Mosaic already took an inventory charge of $213mm in its just ended FY 2Q to write down it's mainly phosphate inventory. We expect a weak fiscal 3Q with fertilizer volumes below normal in early January, as the staring match between the Ag retailers and the farmers plays out. As such, we prefer to be on the sidelines. The recent WASDE report, which showed grain inventories rising, is also negative for the 2009 fertilizer planting season, but we do expect an eventual rebound in 2010."
The Mosaic Company engages in the production and marketing of concentrated phosphate and potash crop nutrients for the agriculture industry worldwide.
Citi analyst says, "Mosaic is the largest phosphate player in the world, but also has a sizable potash business. It exited its nitrogen business through the recent divestiture of Saskferco for $1.6B; Mosaic received $800 mm for its 50% stake in Saskferco. We expect some of US farmers to go on a “fertilizer holiday” in 2009, and as a result, we expect Mosaic's phosphate volumes down 26% and potash down 19%. With falling phosphate prices, Mosaic already took an inventory charge of $213mm in its just ended FY 2Q to write down it's mainly phosphate inventory. We expect a weak fiscal 3Q with fertilizer volumes below normal in early January, as the staring match between the Ag retailers and the farmers plays out. As such, we prefer to be on the sidelines. The recent WASDE report, which showed grain inventories rising, is also negative for the 2009 fertilizer planting season, but we do expect an eventual rebound in 2010."
The Mosaic Company engages in the production and marketing of concentrated phosphate and potash crop nutrients for the agriculture industry worldwide.
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