On Wednesday, RBC Capital Markets analysts adjusted the price target for Mosaic (NYSE:MOS), a major fertilizer company, reducing it to $27 from the previous $30 while maintaining a Sector Perform rating.
The analysts noted that Mosaic could see benefits from the current tight phosphate market, which offers high margins and could lead to improved operations in 2025. The company's prospects are linked to sustained high phosphate prices and operational enhancements.
"However, we see downside risks in phosphate prices given challenged affordability while better operations come with some uncertainty, which may weigh on valuation until phosphate prices stabilize and operations show sustainable improvements.," RBC analysts said.
For 2025, RBC Capital anticipates a moderate decline in phosphate prices. However, this is expected to be more than compensated for by potential increases in production and reductions in costs stemming from operational advancements as the year progresses. In the potash segment, the analyst foresees slightly higher prices as the market recovers, coupled with modest volume growth due to overall market expansion and the commencement of the Esterhazy mine expansion.
Finally, Mosaic's Fertilizantes business is projected to benefit from improved agricultural market conditions in Brazil. Margins are likely to improve, and volumes could increase following the completion of a new blending facility in the third quarter of 2025.
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