Scotia Capital Maintains Sector Outperform on Agrium

Scotia Capital has publised a report on Agrium (NYSE: AGU) saying "It's a rare day, and one that should be noted, when AGU (+3.8%) outperforms CF (-2.8%) by a wide 6.6%."

Scotia Capital goes on to write, "Such was the case yesterday. While unusual, yesterday makes sense, due to nitrogen panic coming out of the Black Sea, which could have a more meaningful impact to CF's 85% N EBITDA compared to AGU's 40% N EBITDA. Yet again, the safety of AGU's retail business trumped, and why it continues to be our top pick in this choppy market. As we have been in a mood lately to stress-test bear cases, we recall AGU's Q4/08 Retail inventory write-down. Given the sharp 15% price drop in Black Sea urea in the past 48 hours, we have taken a look at the likelihood of Retail taking its second ever write-down."

Scotia Capital maintains its Sector Outperform rating and $109 price target on Agrium, which closed yesterday at $70.48.