UPDATE: Canaccord Genuity Downgrades Mosaic to Hold on Potash Outloook
Canaccord Genuity reduced its rating on Mosaic (NYSE: MOS) from Buy to Hold and lowered its price target from $65 to $55.
Canaccord Genuity noted, "We have lowered our rating on the shares of Mosaic to a HOLD from Buy previously and have lowered our target price to US$55 (from US$65 previously), based upon a 12x multiple to our blended F2013E/F2014E EPS of US$4.63. … The market is currently in oversupply, 25% of the annual consumption that is China and India is playing passively at the moment, and the spot markets can sense the near-term price erosion as a result and have become more aggressive in their price demands as well as more passive regarding their timing of purchases. Even though we have seen good US potash demand this fall, quarterly earnings have once again become quite volatile due to the lumpy nature of sales volumes in this environment.
Mosaic closed at $50.75 on Tuesday.
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