* Berenberg’s Aron Ceccarelli downgraded Nutrien Ltd. (NTR-N, NTR-T -1.84%decrease) to “hold” from “buy” and dropped his target to US$49 from US$92. The average target on the Street is US$85.59.
If the downgrade is so substantial (U.S. $49 vs. average of U.S. $85.59) don't they required some additional explanation? These "experts" should know many investors would take the numbers at face value and perhaps make some eventually regrettable decisions. Maybe the Globe just can't include all the details in such a short blurb, but if the numbers are so material should either the analyst, or the Globe, provide more details?
What's your view on this? And would you by any chance have those missing details? Thanks.
The main thesis was declining fertilizer prices. Also, a bumper crop in corn implies less fertilzer demand in the short term. Not all brokerage reports are made public, so the Globe just may not have details. To us, this looks like the analyst is trying to make a point. He specifically lowered the target to be the lowest on the Street. Thus, if the stock does decline, he can brag that he called this best. There is economic/cyclical risk with NTR. But it is 9X earning, with a 3.8% dividend that was raised in February. We think the valuation reflects a lot of the risks already. It will have lower earnings this year, however.