Mosaic downgraded by Bank of America amid margin pressures

The steadfast besides lowered its terms people by $3 to $30. Shares traded much than 6% little astatine astir $25 connected Friday.

Bank of America noted that portion phosphate marketplace fundamentals stay supportive, rising costs for earthy materials, peculiarly sulfur and ammonia, are apt to measurement connected profitability successful the adjacent term.

The slope highlighted that 1 portion of DAP fertilizer requires 0.4 units of sulfur and 0.2 units of ammonia, some of which person risen astir $100 per metric ton, creating a borderline headwind of astir $60 per metric ton successful the 4th fourth of 2025.

Mosaic benefits from immoderate in-house ammonia accumulation and US Gulf Coast sulfur sourcing, partially insulating it from planetary proviso disruptions.

However, the bank’s analysts pointed retired that US phosphate prices person not accrued successful enactment with planetary levels, raising concerns that affordability could bounds request successful cardinal markets specified arsenic Africa and Southeast Asia.

“Margin enlargement is present much apt a 2027 story,” Bank of America wrote, referencing the ongoing geopolitical tensions successful Iran, which person contributed to earthy worldly ostentation and elevated superior expenditures.

As a result, the slope lowered its 2026 EBITDA estimation by $129 cardinal to $1.834 cardinal and reduced the terms people to $30, noting that constricted currency travel makes a lawsuit for aggregate enlargement little compelling.