Credit Suisse Incrementally More Bearish On Potash Corp Despite 'The Worst Is Over' In The Potash Market

• Shares of Potash Corporation of Saskatchewan POT have lost nearly 45 percent year to date and hit a new 52-week low of $19.48 on Friday.
• Christopher Parkinson of Credit Suisse maintained an Underperform rating on the stock with a price target lowered to $29 from a previous $32.
• Parkinson noted that a while "the worst is over" for the potash market, the company's "slow and steady" strategy will hurt investors.

Shares of Potash Corp reached a new 52-week low of $19.48 early Friday. The stock is down nearly 45 percent year to date and down nearly 60 percent over the past five years. In a report published Friday, Credit Suisse analyst Christopher Parkinson maintained an Underperform rating on Potash Corp with a price target lowered to $29 from a previous $32. According to the analyst, "the worst is over" for the potash market due to "precipitous price declines" throughout the second quarter. However, an actual recovery in the market is not on the horizon. Parkinson continued that Potash Corp should receive credit for "moving in the right direction" with its initiatives including mine optimization. Nevertheless, it is not enough to outweigh industry wide headwinds. Meanwhile, the analyst suggested that the company's K+S bid is "excessively generous." Looking forward to 2016, Parkinson stated that he isn't expecting any material improvements in emerging market demand, or overall farmer sentiment. As such, potash pricing is expected to be "flattish" in the first of 2016 but still lower year over year. Parkinson also stated that despite market fundamentals, the company's balance sheet is still "pristine" with "significant" optionality regarding its equity investments which implies a dividend cut is not likely in the near-term. Finally, Parkinson lowered his 2016 earnings per share estimate for Potash Corp to $1.80 from $1.90 given ongoing industry wide headwinds.