Goldman (GS) Ratings on (POT) (AGU) (CF)

In fertilizers potash continues to be in strong demand, and that is reflected in the performance of Potash Corp. (NYSE:POT), even though it has pulled back in the last 10 days.

Goldman Sachs (NYSE:GS) continues to be high on the company, and upgraded it from "Neutral" to "Buy," citing its strong leverage to the potash nutrient.

With competitors Agrium (NYSE:AGU) and CF Industries (NYSE:CF), Goldman looked them more negatively, as their exposure to nitrogen is expected to put downward pressure on the company, as prices are expected to continue to fall.

The latter two fertilizer companies were downgraded by Goldman to "Sell," with profits being under pressure.

Potash Corp. closed Monday at $55.86, gaining $1.34, or 2.46 percent. CF Industries closed at $127.14, dropping $0.26, or 0.20 percent. Agrium closed at $88.33, falling $1.75, or 1.94 percent.

Goldman has a price target on Potash of $58.

CF Industries (CF) Struggles to Justify Terra Acquisition

The acquisition of Terra Industries by CF Industries (NYSE:CF) was expected to generate major benefits for the company, but so far it has resulted in CEO Steve Wilson having to go on the defensive as corn prices continue to be the main driver of the company, and not the expected benefits of the merger.

CF makes nitrogen and phosphate fertilizers, both crucial material for farmers. The company spent most of 2009 and part of 2010 in hot pursuit of Terra, all the while fending off a hostile bid from Canada's Agrium (NYSE:AGU).

Ultimately, CF emerged the winner of the so-called fertilizer wars when it clinched Terra for $4.6 billion in cash and stock, more than double the initial offer.

The deal made CF the world's second-largest producer of nitrogen, after Norway's Yara (YAR.OL), by increasing its number of fertilizer plants to seven from two. The buyout also brought access to pipelines and barges in the U.S. Midwest, the world's largest corn-growing region.




Full Story

Barclays Previews Potash (NYSE:POT), Earnings Below Consensus

In an earnings preview of Potash Corp. (NYSE:POT), Barclays (NYSE:BCS) sees them coming in significantly below consensus.

Barclays says, "Potash Corp will report Q4 2010 results before market open on January 27, 2011. We are forecasting earnings of $1.53/sh versus consensus of $1.64/sh...Potash: Price Increases Start Trickling In: We are expecting potash pricing to improve in Q4 over Q3 levels as December sales should reflect the $50/ton price increase announced in North America in September...Phosphates: Margin Expansion Hampered by Rising Costs: With rising finished phosphate and feed prices we expect POT will realize significantly better phosphate prices in Q4 over Q3 levels...Nitrogen: Strong Pricing in the Quarter: With nitrogen shortages driving higher prices, we expect POT to realize significantly better nitrogen pricing in Q4 over Q3 levels."

Barclays reiterates an "Overweight" rating on Potash Corp. (POT), which was trading at $162.76, down $2.36, or 1.43 percent, as of 2:14 PM EST. Barclays has a price target of $165 on Potash.

Potash (NYSE:POT) Price Target Raised on Increased Fertilizer Outlook

Analysts' Upgrades, Downgrades

Barclays (NYSE:BCS) said their maintaining their "Overweight" rating on Potash Corp. (NYSE:POT), citing an expected increase in production of potash, along with price increased for phosphate and nitrogen.

"Earlier this week we re-instated our rating on Potash Corporation after being restricted on the company since August 17. We had the opportunity to revise our model so as to reflect the changes that have occurred in the fertilizer industry since we have been restricted and incorporate new company guidance...We have incorporated our new fertilizer price deck and recent company guidance into our model. Specifically, in addition to the price increase in nitrogen and phosphate, we have increased our potash production outlook for 2010 and 2011 and have also re-valued POT's equity portfolio based on previous day closing prices," Barclays said.

Potash was trading at $136.00, gaining $1.37, or 1.02 percent at 2:02 PM EST. Barclays increased their price target on the fertilizer giant from $130 to $160.