Potash Upgraded as Analyst Sees 'No Reason to Fight Tape'

Shares of

are outperforming the broader indexes after Miller Tabak upgraded the stock from Sell to Neutral and raised the price target from $28 to $30. Analyst Tim Tiberio's bearish thesis “remains intact,” but sees “no reason to keep fighting the tape.” The shares are up 10.4 percent from the closing price of January. “According to the Fertilizer Institute (TFI), North America wholesale potash inventory decreased by 5% m/m and 10% y/y in March, despite a 22% m/m rise in production,” said the analyst. In Tiberio's view, “the robust domestic fertilizer movement was a result of Canpotex positioning ahead of a Canadian edict prioritizing grain shipments over chemical rail moves in early March as well as forward buying by US distributors looking to lock in 5-year-low prices even as grain prices have rebounded since the beginning of 2014.” “Lingering rail congestion will likely keep Midwest spot prices higher through May, but Q1 domestic shipment volumes confirms our suspicion that US distributor-consignment programs have been pulling forward demand to take advantage of prices at 5-year lows.” Shares are up 2.07 percent to $34.59 in Tuesday's trading.