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Nutrien (NTR) Rallies 59% in 6 Months: What's Driving the Stock?

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Nutrien Ltd.’s (NTR - Free Report) shares have shot up 59.2% over the past six months. The company has also outperformed its industry’s rise of 56.8% over the same time frame. It has also topped the S&P 500’s roughly 0.2% rise over the same period.

Let’s dive into the factors behind this fertilizer maker’s stock price appreciation.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

What’s Going in NTR’s Favor?

Nutrien, currently sporting a Zacks Rank #1 (Strong Buy), is benefiting from strong demand and higher prices for fertilizers, aided by the strength in global agriculture markets. The company is also gaining from higher selling prices for crop nutrients. Higher prices drove sales across the company’s segments in the fourth quarter of 2021.

Potash prices have strengthened on the back of robust global demand, aided by strong grower economics, higher crop prices and low global inventory levels. Tight availability along with strong demand is also driving up phosphate prices globally. Lower global supply availability stemming from reduced operating rates and a spike in energy prices have also boosted nitrogen prices. Higher prices are expected to drive the company’s sales and margins for full-year 2022.

The company is also well positioned to gain from acquisitions, cost efficiency, and increased adoption of its digital platform. It also continues to expand its footprint in Brazil through acquisitions. Nutrien expanded its network through the completion of 14 retail acquisitions in 2021.

Nutrien is also taking actions to boost potash production in the wake of tightening global potash market conditions. The move is in response to strong market fundamentals and is geared to enable its customers have the crop inputs they require to feed a growing population. The company’s actions to boost production are driving volumes in its Potash segment.

The company, in its fourth-quarter call, said that the outlook for global agriculture and crop input markets remains strong and it is well positioned to deliver significant growth in earnings and free cash flow this year.

Earnings estimates for Nutrien have also been going up over the past two months. The Zacks Consensus Estimate for 2022 has increased around 37.8%. The consensus estimate for first-quarter 2022 has also been revised 4.5% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.

 

Nutrien Ltd. Price and Consensus

 

Nutrien Ltd. Price and Consensus

Nutrien Ltd. price-consensus-chart | Nutrien Ltd. Quote

 

Stocks to Consider

Other top-ranked stocks worth considering in the basic materials space include The Mosaic Company (MOS - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Commercial Metals Company (CMC - Free Report) .

Mosaic, sporting a Zacks Rank #1, has a projected earnings growth rate of 125% for the current year. The Zacks Consensus Estimate for MOS's current-year earnings has been revised 29.2% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Mosaic beat the Zacks Consensus Estimate for earnings in three of the last four quarters, while missed once. It has a trailing four-quarter earnings surprise of roughly 3.7%, on average. MOS has rallied around 121% in a year.

AdvanSix, carrying a Zacks Rank #1, has an expected earnings growth rate of 64.9% for the current year. ASIX's consensus estimate for current-year earnings has been revised 58% upward in the past 60 days.

AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has rallied around 99% in a year.

Commercial Metals, carrying a Zacks Rank #1, has a projected earnings growth rate of 80.7% for the current fiscal year. The Zacks Consensus Estimate for CMC's current fiscal year earnings has been revised 13.7% upward over the past 60 days.

Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 13.1%, on average. CMC has gained around 38% in a year.


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