Citi Downgrades Potash, Mosaic (POT, MOS)

Citi Investment Research is downgrading shares of Potash POT and Mosaic MOS from Buy to Hold, and cut the price targets to $60 and $84, respecitvely.

In a note to investors, Citi writes, "Fertilizer equities have been among the best performing stocks over the past eight months. Stock prices in our fertilizer universe have increased on average more than 100% since last July compared to a gain of ~27% for the S&P 500. We are not turning bearish on the fundamentals of the fertilizer cycle, which remain robust as we confirmed during our recent trip to Brazil. However, we think much of the good news is factored into current equity prices. Realized fertilizer prices will improve as old contracts run off and more product is shipped at newly announced higher prices, boosting earnings. But this trend is reflected in high P/E multiples for the group. Lacking well-defined near-term catalysts, we see growing risk that the stocks could trade sideways into the summer. As a result, we move from Buy to Hold for both POT and MOS."