Mosaic Stock Gains on Strong Fertilizer Demand and Costs Actions

The Mosaic Company MOS benefits from healthy demand for phosphate and potash, high-return investments and actions to improve its cost structure amid headwinds from soft fertilizer prices.Mosaic, which is among the prominent players in the fertilizers space along with Nutrien Ltd. NTR, CF Industries Holdings, Inc. CF and Intrepid Potash, Inc. IPI, is gaining from the strong demand for phosphate and potash, aided by favorable agricultural conditions. Attractive farm economics is driving demand for fertilizers globally. Farmer economics remain favorable in most global growing regions due to strong crop demand and affordable inputs.Demand for grains and oilseeds remains high globally. Improved farmer affordability is also likely to continue to drive demand for fertilizers. Improved crop prices have also incentivized fertilizer application by growers. In North America, strong yields and growers’ need to replenish soil nutrients have ushered in a favorable environment. Demand in Brazil is also expected to be driven by healthy grower economics and low levels of inventories. Low inventory levels and pent-up purchases are also expected to drive demand in India.The company is taking actions to reduce costs amid a still-challenging operating environment. Its actions to improve its operating cost structure through transformation plans are expected to boost profitability. MOS remains on track with its cost-reduction plan, which is expected to drive $150 million in run-rate cost reductions by the end of 2025.Mosaic also remains committed to carrying out investments with high returns with moderate capital expenditures. It has completed the 800,000-ton MicroEssentials capacity conversions with volumes expected to rise 25% in 2025. The Esterhazy Hydrofloat project, which will add 400,000 tons in milling capacity, is expected to be completed by the middle of 2025, followed by a ramp up by the end of the year. The construction of a new blending and distribution center in Palmeirante, Brazil is also expected to be completed by mid-2025. The facility is expected to enable Mosaic Fertilizantes to increase overall sales by one million tons.Weak fertilizer prices are likely to weigh on MOS’s sales and margins. Prices of phosphate and potash have retreated since the back half of 2022 from their peak levels attained in the first half, riding on the impacts of the Russia-Ukraine war and disruptions due to the sanctions in Belarus. Lower potash selling prices hurt the company’s sales in the most recent quarter. Net sales declined nearly 11% year over year to $2,815.9 million in the fourth quarter. While prices have recovered somewhat lately, weaker year-over-year selling prices are likely to continue to dent the company’s top line in the first quarter of 2025.MOS expects phosphate markets to stay tight due to ongoing supply limitations and rising demand for fertilizers, fuel and industrial uses. China's phosphate export outlook remains positive for the long term, as domestic consumption and industrial needs will continue to take precedence over fertilizer exports. Potash markets are expected to improve in the short to medium term, driven by output cuts from major producers in Russia, Belarus and China, along with challenges to planned expansions in Laos. Another prominent fertilizer maker, Nutrien sees potash sales volume in the range of 13.6-14.4 million tons for 2025, consistent with its global shipments outlook and takes into consideration some uncertainty about the potential imposition and impact of U.S. tariffs, as well as global supply availability. NTR’s phosphate sales volume projection of 2.35-2.55 million tons implies reduced production at its White Springs facility in the first half of 2025 and higher operating rates in the second half compared with the previous year.CF Industries expects the global supply-demand balance to continue to be positive since inventories around the globe are considered to be below normal and production economics for the industry's marginal producers in Europe remain challenging. CF expects average U.S. corn returns to be higher than soybeans, owing in part to rising corn prices as a result of robust corn exports and lower 2024 yield predictions, which are projected to benefit corn plantings and nitrogen demand in the region.Intrepid Potash, in 2025, plans to build on the significant improvements in potash production it saw last year. IPI maintains its focus on operational efficiencies and cost controls to drive margins this year.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CF Industries Holdings, Inc. (CF): Free Stock Analysis Report The Mosaic Company (MOS): Free Stock Analysis Report Intrepid Potash, Inc (IPI): Free Stock Analysis Report Nutrien Ltd. (NTR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks