Valued at a market cap of $8.6 billion, The Mosaic Company (MOS) produces and markets concentrated phosphate and potash crop nutrients for the global agriculture industry. The Tampa, Florida-based company’s products are processed into crop nutrients and then shipped through rail, barge, and ocean-going vessels to customers in major agricultural centers globally. It is expected to announce its fiscal Q4 earnings results on Wednesday, Feb. 19.
Prior to this event, analysts expect the chemicals company to report a profit of $0.54 per share, down 23.9% from $0.71 per share in the year-ago quarter. The company has surpassed Wall Street's bottom-line estimates in just one of the last four quarters while missing on three other occasions. In Q3, MOS’ adjusted EPS of $0.34 fell short of the consensus estimates by a significant margin of 41.4%.
For fiscal 2024, analysts project Mosaic to report an EPS of $2.05, down 42.6% from a profit of $3.57 in fiscal 2023. Nonetheless, in fiscal 2025, EPS is expected to rebound slightly, growing by 6.8% year-over-year to $2.19.
Shares of MOS have declined 15.6% over the past 52 weeks, significantly underperforming both the S&P 500 Index's ($SPX) 25% return and the Materials Select Sector SPDR Fund’s (XLB) 8.8% return over the same time frame.
On Nov. 12, shares of MOS crashed 7.7% following its weaker-than-expected Q3 earnings release. The company’s net sales declined 20.8% year-over-year to $2.8 billion and missed the forecasted figure by a notable margin of 14.3%. Nonetheless, its net income in the quarter totaled $122 million, compared with a net loss of $4 million in the year-ago period. However, its adjusted EPS of $0.34 per share fell short of the consensus estimate by a significant margin, further dampening investor confidence. Lower selling prices and adverse weather conditions led to its below-par performance.
Wall Street analysts are cautious about Mosaic’s stock, with a "Hold" rating overall. Among 15 analysts covering the stock, four recommend "Strong Buy," 10 recommend “Hold,” and one indicates a “Strong Sell” rating. This configuration is slightly less bullish than three months ago, with five analysts suggesting a “Strong Buy.”
The mean price target for MOS is $31.80, which indicates a modest 17.3% potential upside from the current levels.
