Mosaic Company Faces Profit Decline Ahead of Q3 Earnings Announcement
With a market cap of $8.4 billion, The Mosaic Company (MOS) operates in the agricultural chemicals sector. Based in Tampa, Florida, it is a prominent global producer of concentrated phosphate and potash, vital nutrients for agriculture. The company is set to release its fiscal Q3 earnings results on Tuesday, Nov. 5.
Analysts Expect Lower Profits
Leading up to this announcement, analysts predict the fertilizer producer will report a profit of $0.58 per share, reflecting a 14.7% decrease from the $0.68 per share reported in the same quarter last year. In the past four quarters, Mosaic has only surpassed Wall Street’s earnings estimates once, missing on three occasions. Recently, the company fell short of the consensus earnings per share (EPS) estimate by a sizeable margin of 20.6%.
Fiscal 2024 Projections Show Declines
For fiscal 2024, analysts forecast MOS to achieve an EPS of $2.27, marking a 36.4% reduction from $3.57 in fiscal 2023.
Mosaic Struggles Compared to Peers
Year-to-date, MOS has experienced a decline of 26.5%, significantly trailing the S&P 500 Index’s ($SPX) nearly 23% rise and the Materials Select Sector SPDR Fund’s (XLB) 14.1% gain during the same time frame.
Market Response and Analyst Outlook
Following its Q2 earnings release on Aug. 6, shares of Mosaic fell 1.4% due to an adjusted EPS of $0.54 and revenue of $2.8 billion, which were below expectations. Moreover, the company reported a net loss of $161.5 million, in contrast to a profit of $369 million during the same quarter the previous year. This downturn indicates sharp declines in profitability, especially with major segments like Potash and Fertilizantes showing reduced sales and pricing pressures.
Despite these challenges, analysts remain cautiously optimistic about Mosaic’s stock, assigning it a “Moderate Buy” rating overall. Among the 14 analysts tracking the stock, there are five “Strong Buys,” eight “Holds,” and one “Strong Sell.” This is a slight shift from three months ago, when six analysts recommended a “Strong Buy.” The average analyst price target for MOS sits at $32.73, suggesting a potential upside of 24.6% from current levels.
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On the date of publication, Sohini Mondal 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.
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