The Mosaic Company (MOS) is the world's largest integrated phosphate producer and one of the top four potash producers, with a market cap of $8.7 billion. Headquartered in Tampa, Florida, the company was formed due to the merger between Cargill's fertilizer arm and IMC Global Incorporated. It primarily mines phosphate rock in Central Florida and potash in North America, particularly Saskatchewan.
Shares of Mosaic have underperformed the broader market considerably over the past year. MOS has declined 36.2% over this time frame, while the broader S&P 500 Index ($SPX) is up 19.6%. In 2024 alone, the stock is down 24.3%, compared to SPX’s 12% return on a YTD basis.
Narrowing the focus, MOS has also lagged behind the VanEck Agribusiness ETF’s (MOO) 19.2% decline over the past year.
Mosaic's underperformance relative to the broader market can be attributed to a complex market environment during the past year, marked by lower selling prices and subdued demand in certain segments.
However, shares of MOS edged up 1.8% on Aug. 6 after the company announced its Q2 earnings report. Despite missing Street’s projections, Mosaic’s strategic growth initiatives appear to bear fruit as the company’s Mosaic Biosciences division expanded its reach to 5 million acres across North and Central America in the 2024 crop year.
Moreover, shares of Mosaic surged by over 4% on Jul. 24 after China announced additional restrictions on fertilizer exports. The measures aim to manage domestic prices, reduce farming costs, and strengthen grain security in China.
For the current fiscal year, ending in December, analysts expect MOS’ EPS to decline 28.9% year over year to $2.54. Moreover, the company’s earnings surprise history is grim. It beat the consensus estimates in one of the last four quarters while missing on three other occasions.
Mosaic stock has a consensus “Moderate Buy” rating overall. Out of 15 analysts covering the stock, six rate it as a "Strong Buy," eight suggest a "Hold," and one advises "Strong Sell.”
This configuration has been fairly consistent over the past months.
On Jul. 15, RBC Capital analyst Andrew Wong maintained Mosaic with a “Sector Perform” and lowered the price target from $32 to $30.
The mean price target of $35.60 suggests a 31.6% premium to MOS from current levels. The Street-high target of $50 represents an impressive upside potential of 84.8%.
On the date of publication, Kritika Sarmah 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.
