Yahoo Finance Mosaic (MOS) to Gain on Strong Demand, Vale Assets Buyout
We issued an updated research report on The Mosaic Company MOS on Aug 16.
Mosaic’s adjusted earnings of 40 cents per share in the second quarter beat the Zacks Consensus Estimate of 39 cents.
The company raised adjusted earnings per share (EPS) guidance for 2018 factoring in strong business performance and lower expected effective tax rate. For 2018, the company expects adjusted earnings in the range of $1.45-$1.80 per share, up from the prior view of $1.20-$1.60. It also expects adjusted EBITDA for 2018 in the band of $1.80-$1.95 billion, up from the prior view of $1.70-$1.90 billion.
Shares of Mosaic have moved up 16.5% in the past six months compared with the industry’s 11.9% rise.
Vale Fertilizantes Buyout to Deliver Significant Synergies
In January 2018, Mosaic completed the $2.5-billion buyout of Brazil-based Vale S.A.’s Vale Fertilizantes business. The acquisition enabled the company to capitalize on the rapidly growing Brazilian agricultural market and improve business conditions.
Notably, the acquisition is expected to be accretive to Mosaic's EPS in 2018. It is projected to generate $275 million of annualized improved cash flow by the end of 2020 (with $100 million in synergies expected in 2018) along with providing considerable leverage to improvements in the crop nutrient business cycle.
Rising Global Demand for Fertilizers to Boost Margins
Mosaic is well positioned to leverage the rising global demand for fertilizers. In particular, the company is seeing strong demand for nutrients in India, a major import market. Mosaic expects market conditions to improve and anticipates demand for phosphate and potash to continue rising in 2018. It envisions 2018 to be another record year for global shipments of the products.
The Mosaic Company Price and Consensus
The Mosaic Company Price and Consensus | The Mosaic Company Quote
Zacks Rank & Other Stocks to Consider
Mosaic currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the basic materials space are Huntsman Corporation HUN , Ingevity Corporation NGVT and Celanese Corporation CE , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Huntsman has an expected long-term earnings growth rate of 8.5%. Its shares have returned 24% in a year.
Ingevity has an expected long-term earnings growth rate of 12%. Its shares have surged 74.8% in a year.
Celanese has an expected long-term earnings growth rate of 10%. Its shares have gained 20.3% in a year.
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