Goldman Sachs Starts Potash Corp. (POT) at Buy, Says Potash Fundamentals Near Bottom

December 12, 2012 8:16 AM EST Send to a Friend
Get Alerts POT Hot Sheet
Price: $33.96 +4.36%

Rating Summary:
    10 Buy, 19 Hold, 5 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 24 | Down: 28 | New: 14
Trade POT Now!
Join SI Premium – FREE
Goldman Sachs initiates coverage on Potash Corp. (NYSE: POT) with a Buy rating and $46 price target, suggesting 15% upside. The firm cited leverage to a turn in potash fundamentals which they said are near a bottom.

The firm comments, "Following the recent announcement of production curtailments amounting to about 15% of annual capacity and broad-based inventory destocking, we believe potash fundamentals are approaching trough. Coupled with significant 2012 underperformance (POT -3% YTD vs. the S&P +13% and corn +14%) we believe risk/reward is increasingly attractive on a multi-year basis, with valuation now at 8.4x 2013 EV/EBITDA, a nearly 18% discount to the five-year average. Further, we believe the market is no longer giving POT credit for significant brownfield capacity expansions set to come online beginning in 2H2013 that should drive 20-25% K volume growth in 2014-15."

For an analyst ratings summary and ratings history on Potash Corp. click here. For more ratings news on Potash Corp. click here.

Shares of Potash Corp. closed at $40.90 yesterday.


Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

New Coverage

Related Entities

Goldman Sachs, Standard & Poor's

Add Your Comment