Analyst Update: CF Industries, Mosaic , Intrepid Potash

Cowen and Company adjusted its ratings and price targets on fertilizer stocks CF Industries Holdings, Inc. (NYSE:CF), Mosaic Co (NYSE:MOS), and Intrepid Potash, Inc. (NYSE:IPI)

by Karee Venema

Published on Apr 14, 2016 at 2:21 PM
Updated on Jul 20, 2020 at 1:39 PM

Cowen and Company offered up a "cautious view" of the agriculture industry, saying its review of data suggests "pricing and volume issues for phosphate and potash products over the next two years." The brokerage firm also drilled down in on a number of individual fertilizer stocks, including CF Industries Holdings, Inc. (NYSE:CF), Mosaic Co (NYSE:MOS), and Intrepid Potash, Inc. (NYSE:IPI). Here's a quick roundup of Cowen's analyst notes on CF, MOS, and IPI.

  • CF, for instance, was downgraded to "underperform" from "market perform" at the brokerage firm, which also lowered its price target to $25. As such, the shares are off 2.4% at $30.49 -- widening their year-to-date deficit to 47%. Amid this downtrend, short sellers have been piling on, with short interest surging 17.3% in the most recent reporting period. However, short interest still accounts for less than 9% of CF Industries Holdings, Inc.'s float, meaning the bearish bandwagon is far from full. The stock could encounter stiffer headwinds, should short sellers continue to increase their exposure.

  • Cowen also lowered its rating on MOS to "underperform" from "market perform," while reducing its price target by $9 to $23. While the shares are off 4.8% at $25.25, though, they may have found a foothold atop their 10-day moving average -- a trendline that ushered MOS lower in late 2015. Longer term, the stock has added almost 15% since hitting a seven-year low of $22.02 in early February. Should Mosaic Co resume its recent rebound, the stock could benefit from an unwinding of skepticism among short-term options traders. In fact, MOS' Schaeffer's put/call open interest ratio (SOIR) of 1.01 sits just 8 percentage points from a 52-week peak.

  • Finally, IPI was downgraded to "outperform" from "market perform," as well, sending the stock down 8.6% to $1.01. IPI has been a long-term laggard, though, surrendering 92% year-over-year, and more recently, struggling under the weight of its 20-day moving average. Short sellers have been betting on more downside, too. Short interest jumped 7.4% in the latest reporting period to 4.4 million shares -- or 7.9% of Intrepid Potash, Inc.'s available float.
For other stocks in analysts' crosshairs, read Analyst Upgrades: Chipotle Mexican Grill, Inc., 3D Systems Corporation, and Kate Spade & Co and Analyst Downgrades: Potash Corporation of Saskatchewan, Symantec Corporation, and Western Digital Corp.

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