Dahlman Rose Reiterates Hold Rating on Mosaic

Dahlman & Rose is out with a research report this afternoon, where it reiterates its Hold rating on Mosaic MOS. The DR analysts noted that, in a surprise ruling last Friday, the District Court for the Middle District of Florida issued an injunction that prevents all mining on the Hardee County section of the SFM phosphate mine. This judgment comes after a ruling by the Appellate Court that set aside an earlier injunction and asked the lower court to revisit the case and make a judgment on the merits of the argument as to whether the Army Corp of Engineers went through proper procedures to grant the permit. Mosaic will probably appeal the new injunction, a process which should take 3-6 months. As for valuation, the analysts remarked, “The net impact for Mosaic is negative since it will face higher costs for at least the next 3 to 6 months no matter what the outcome from the higher court.”