The Mosaic Company Delivers Mixed Earnings Amid Market Challenges

Valued at a market cap of $9.7 billion, The Mosaic Company (MOS) specializes in producing and marketing concentrated phosphate and potash crop nutrients. Headquartered in Tampa, Florida, Mosaic operates mines and production facilities that manufacture various phosphate crop nutrients, including diammonium phosphate, monoammonium phosphate, and MicroEssentials ammoniated phosphate products, as well as phosphate-based animal feed ingredients under the Biofos and Nexfos brands.

Stock Performance Overview

Over the past 52 weeks, shares of Mosaic have lagged behind the broader market. MOS has gained 4.9%, while the S&P 500 Index ($SPX) has soared 8.2%. However, on a year-to-date (YTD) basis, MOS is up 23.9%, significantly outperforming SPX’s 4.7% decline.

When comparing performance to the First Trust Indxx Global Agriculture ETF (FTAG), MOS has also outperformed, as FTAG has seen a 1.4% decline over the past year but has appreciated by 7.6% YTD.

Latest Earnings Results

On May 6, MOS released its mixed Q1 earnings results after the market closed. The company reported a revenue decline of 2.2% from the previous year, totaling $2.6 billion. This decrease was largely attributed to a drop in potash segment sales due to lower selling prices. The reported revenue fell short of consensus estimates by 1.9%.

On a positive note, operating earnings rose 95.8% compared to the previous year, reaching $338.5 million, buoyed by better operational efficiency and ongoing cost-reduction efforts. Although adjusted earnings fell 24.6% to $0.49 per share due to a decline in adjusted EBITDA, this figure still exceeded Wall Street’s expectations by 25.6%. Furthermore, MOS raised its fiscal 2025 potash production forecast to 9 to 9.4 million tonnes to meet strong international demand and favorable pricing.

Analyst Expectations

For the current fiscal year ending in December, analysts project MOS’ EPS to grow 11.1% year over year to $2.20. However, the company’s earnings surprise history has been disappointing, with three misses in the last four quarters.

Among the 17 analysts covering the stock, the consensus rating is a “Moderate Buy,” based on nine “Strong Buy” and eight “Hold” ratings. This consensus reflects a slight increase in bullish sentiment compared to a month ago when only eight analysts suggested a “Strong Buy” rating.

Price Targets

On April 22, Barclays PLC (BCS) analyst Benjamin Theurer maintained a “Buy” rating on MOS, setting a price target of $33, which implies an 8.4% potential upside from current levels. The average price target of $33.23 suggests a 9.1% potential upside, while the highest target of $44 indicates a substantial upside of 44.5%.

On the date of publication, Neharika Jain did not hold (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.

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.