Deutsche Bank Increases Price Target on Potash to $185 (POT)

Deutsche Bank is out with its report today on Potash POT, raising its price target from $150 to $185. In its note to clients, Deutsche Bank writes, "PotashCorp had a strong Q4 release with core gross profits beating expectations and the mid-pt. of ‘11 EPS guidance ($9) above consensus. With the duration of Canpotex' potash contract with China shortened to 6 mos from 1 yr and shipments to China constrained by sold-out conditions in Q1, we expect the price gap between China ($400/mt), southeast Asia/Brazil ($440-$450)/mt and the US ($565/mt) to narrow in 2H'11 (with China prices moving higher). However with valuation of 18.3x '11E EPS fair on absolute and relative P/E metrics, Hold. Our $185 target is based on PotashCorp trading at 18x forward EPS in 12 mos, inline with its current P/E multiple." Shares of POT are trading pre-market at $175, up 0.49% from yesterday's close.