Credit Suisse Initiates Coverage On Mosaic, Sees Notable Upside

Credit Suisse analyst John Roberts initiated coverage of Mosaic Co MOS with an Outperform rating and a price target of $60, implying an upside of 37%.
The analyst mentions that MOS is not exposed to the hydrocarbon-based nitrogen market. Roughly ~40% of 2022e EBITDA is from phosphate, in which supply growth is decelerating.
He added that MOS also has 50%+ of sales in Brazil, the fastest growing large fertilizer market.
Roberts states that the other large global producers are Saudi Arabia and China. Morocco is the lowest cost producer and expands regularly.
MOS operates the largest wholesale fertilizer distribution business in Brazil, with domestic phosphate and potash capacity and shares in Canpotex potash exports from Canada to Brazil, notes the analyst.
According to Roberts, key risks to the downside include farmers delaying potash and phosphate applications to “mine the soil,” lower farm income from a more rapid recovery in Ukraine grain output, and faster recovery in Russia/Ukraine potash supplies.
Price Action: MOS shares are trading lower by 5.81% at $43.62 on the last check Thursday.
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