The Mosaic Company (MOS) is the world's largest integrated phosphate producer and one of the top four potash producers, with a market cap of $10 billion. Headquartered in Tampa, Florida, the company was formed due to the merger between Cargill's fertilizer arm and IMC Global Incorporated. It primarily mines phosphate rock in Central Florida and potash in North America, particularly Saskatchewan.
Shares of Mosaic have underperformed the broader market considerably over the past year. MOS has declined 11.9% over this time frame, while the broader S&P 500 Index ($SPX) is up 28.9%. In 2024 alone, the stock is down 13.3%, compared to SPX’s 11.2% return on a YTD basis.
Narrowing the focus, MOS has also underperformed the iShares Emergent Food and Agtech Multisector ETF’s (IVEG) 3% gains over the past year.
MOS stock has suffered over the past year as fertilizer producers grappled with shrinking profitability caused by a notable drop in prices for crop-nutrient ingredients. However, on April 30, shares of Mosaic rose after announcing the sale of its stake in a Saudi joint venture for around $1.5 billion. The move aims to streamline operations and enhance transparency regarding asset values.
For the current fiscal year, ending in December, analysts expect MOS’ EPS to decline 26.1% year over year to $2.64. Moreover, the company’s earnings surprise history is mixed. It beat the consensus estimates in one of the last four quarters while missing on three other occasions.
Mosaic stock has a consensus “Moderate Buy” rating overall. Out of 16 analysts covering the stock, six rate it as a "Strong Buy," nine suggest a "Hold," and one advises "Strong Sell.”
This configuration has been consistent over the past months. However, it is slightly more bullish than three months before, with five analysts suggesting a “Strong Buy.”
In a recently published report, Barclays lowered its price target for Mosaic from $42 to $39 while maintaining an “Overweight” rating on the stock.
The mean price target of $37.35 suggests a 20.6% premium to MOS from current levels. The Street-high target of $50 represents an impressive upside potential of 61.4%.
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