Market Overview

Ag Sector Outperforming Sharply; CF Working Toward MLP, RBC Started Mosaic, Agrium At Outperform

Related MOO
3 Agribusiness ETFs To Play Potential Fertilizer Merger
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Related POT
Agrium Inc. Announces Guidance For Second Half Of 2014, Shares Move Lower
Mosaic Co Lowers Guidance; Potash Corp./Saskatchewan And Agrium Inc. Down In Sympathy

Stocks in the Fertilizer group are moving higher Wednesday afternoon following some new coverage from RBC Capital's Chris Nocella this morning. The Market Vectors Agribusiness ETF (NYSE: MOO) is trading up more than 0.7 percent at last check.

Nocella initiated coverage on the following stocks:

  • Mosaic (NYSE: MOS) - Outperform, $57 price target - The analyst is attracted to a recent trend toward "improving demand in the potash and phosphate markets" and an expectation for "substantial" returns to holders over the next few years. Nocella noted the company's solid position in the phosphate market which could "better position Mosaic if others are interested in its potash assets."
  • Agrium (NYSE: AGU) - Outperform, $122 target - Called Agrium's input business "the most diverse, vertically integrated" within the Ag space. Sees "a clear path to strong earnings growth from both its Retail and Wholesale" units which could translate to "robust cash flows with lower volatility."
  • Potash (NYSE: POT) - Market Perform, $37 target.
  • CF Industries (NYSE: CF) - Market Perform, $235 target.
  • Interpid Potash (NYSE: IPI) - Market Perform, $16 target.

Also impacting the Ag names Wednesday is headlines out of CF the company is working with investment banks related to an MLP.

Morgan Stanley's Adam Parker earlier said he is overweight the material sector. The comment was made in the firm's annual outlook, but Parker also appeared on CNBC highlighting the case.

Mosaic shares are up more than 3 percent recently, shares of Agrium are up 2.2 percent, shares of Potash are up nearly 1 percent, shares of CF are nearly 11 percent and Intrepid Potash shares are up 2.4 percent.

Posted-In: Analyst Color News Sector ETFs Price Target Commodities Initiation Markets Analyst Ratings

 

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