Tampa, Florida-based The Mosaic Company (MOS) produces and markets concentrated phosphate and potash crop nutrients in North America and internationally. With a market cap of $8.9 billion, Mosaic operates through Phosphates, Potash, and Mosaic Fertilizantes segments.
Mosaic has lagged behind the broader market over the past year by a large margin. MOS stock has plummeted 21.4% on a YTD basis and 15.8% over the past year compared to the S&P 500 Index’s ($SPX) surge of 21.2% in 2024 and 32.7% over the past 52 weeks.
Narrowing the focus, MOS has also underperformed the First Trust Indxx Global Agriculture ETF’s (FTAG) 2.2% decline on a YTD basis and dipped marginally over the past 52-week period.
Mosaic stock price tumbled 1.4% in the trading session after the release of its disappointing Q2 earnings report on Aug. 6. The company reported a staggering 17% year-over-year decline in net sales, dropping to $2.8 billion, falling short of Wall Street estimates by a notable 3.9%. Moreover, the company reported a 21.5% drop in adjusted EBITDA, driven by the underperformance of its Potash and Phosphate segments. This resulted in its adjusted EPS tanking 48.1% to $0.54 compared to the year-ago quarter, missing analysts’ earnings estimates by a massive 20.6%.
For the current fiscal year, ending in December, analysts expect Mosaic to report a 36.4% year-over-year decline in adjusted EPS to $2.27. The company’s earnings surprise history is disappointing. It has missed Wall Street’s earnings estimates thrice over the past four quarters while exceeding on another occasion.
MOS stock has a consensus “Moderate Buy” overall. Among the 14 analysts covering the stock, five recommend a “Strong Buy,” eight suggest a “Hold,” and one advises a “Strong Sell” rating.
This configuration is slightly less bullish than a month ago when six analysts gave a “Strong Buy” rating.
On Oct. 12, Barclays PLC (BCS) analyst Benjamin Theurer maintained a “Buy” rating while lowering the price target to $30. The reduction in the target price for Mosaic is attributed to the forecasted impact of hurricanes in Q3 and Q4. Additionally, the falling crop prices have adversely affected farmers’ earnings, shifting their focus towards cost reduction, and posing difficulties for any potential increase in fertilizer prices.
The mean price target of $32.73 represents a premium of 16.6% to current price levels. Meanwhile, the Street-high target of $45 suggests a potential upside of 60.3%.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
