UPDATE: J.P. Morgan Color On CMP

J.P. Morgan, which raised its PT on shares of Compass Minerals International CMP, has provided some color on the company. “If Compass Minerals were to meet its targets, its earnings would probably be much higher than our current estimates,” J.P. Morgan writes. “Compass indicated that its costs of salt were elevated by $4.50 per ton in 2010 because of a 10-week strike, mine expansion-related costs, unplanned repair and maintenance, and inventory management difficulties. “A $4.50 reduction in cost per ton would be $56 million or an earnings improvement of about $1.15 per share, since Compass sold 12.4 millions of salt in 2010. Accordingly, should Compass meet its cost target, its earnings would be about $0.90 higher than our current forecast of $5.80 per share or $6.70 per share, since we have modeled roughly a $1 reduction in per-unit costs. “We note that the Consensus estimate is $5.74 for 2011. Compass, however, does not make infallible forecasts of its own trends and earnings. In 2010, it expected stronger pricing and earnings than it was able to deliver. That being said, each year is different.” Compass Minerals International currently trades at $94.52.