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Potash, Mosaic Strong After Upgrade


A look at what Credit Suisse thinks about this sector.

The following content was originally published on the Buzz & Banter (click for a free trial).

Notice Potash (POT) names are strong today after Credit Suisse upgraded the sector this morning.

The firm sees a recovery in potash pricing after a Chinese contract settlement which it sees as an "attractive entry point to buy into the industry's solid long-term fundamentals." The contract calls for Chinese potash to be priced at $350/mt that will provide a price floor. They expect improved pricing, favorable farmer economics and attractive potash pricing relative to corn which should spike demand.

CS looked at Mosaic (MOS), Intrepid Potash (IPI), Agrium (AGU) and Potash. Daily charts as well as a summary are below.

Mosaic: Maintained its "Neutral" rating with a target price of $67. CS sees challenging outlook for the company because of its phosphate business and fair valuation.

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Intrepid Potash: Raised its rating to "Neutral" from "Underperform" with a price target of $30. CS believes Intrepid Potash is the pure Potash play on a North American pricing recovery, but the firm doesn't see upside in the shares because of an already fair valuation.

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Agrium: Maintained its "outperform" rating and $74 price target. CS says Agrium has less exposure to potash market compared to others, but cheap valuation and solid earnings should drive it higher over the next 12 months.

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Potash: Raised shares to "Outperform" from "Neutral" with a target price of $135. CS favors Potash the most because of its significant leverage to the Potash industry, its capacity expansion plant, and attractive long-term fundamentals.

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