Piper Sandler Downgrades Mosaic (MOS) to Underweight

Piper Sandler analyst Charles Neivert downgraded Mosaic (NYSE: MOS) from Neutral to Underweight, PT $32.00 (from $42.00).

The analyst comments "We are downgrading MOS shares to UW from Neutral due to a deteriorating macro environment that is likely to keep pressure on nutrient pricing. If the U.S. sees a bumper crop in 2024 further pressuring grain pricing, we could see the effects bleed over to Brazil’s fall growing season. This will have a larger impact on MOS shares as they sell key products in this region through the Fertilizantes segment. As such, our Fertilizantes sales estimates decline from $5.5B in 2024 to $5.1B in 2025. While lower feedstock costs and the probability that China keeps phosphate exports capped may act as tailwinds to earnings, our expectation of depressed grain pricing laid out in this report should prove to outweigh any nutrient pricing or margin improvements out into 2H24 and 2025. The $32 PT (prior $42) is based on 6.7x EV/FY25E EBITDA (assumes $2.10B EBITDA, $3.41B net debt and 328M shares), up slightly from 6.6x FY24E to reflect midcycle valuations."

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

Shares of Mosaic closed at $30.89 yesterday.

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