BofA Securities Downgrades Mosaic (MOS) to Neutral

BofA Securities analyst Steve Byrne downgraded Mosaic (NYSE: MOS) from Buy to Neutral with a price target of $30.00 (from $33.00).

The analyst comments "We are downgrading MOS to Neutral from Buy as margin expansion in phosphate fertilizers is likely delayed a year. We have been bullish phosphates and expect prices to sustain higher highs over time, however the conflict in Iran is proving inflationary for raw materials (namely sulfur and ammonia) that is creating a difficult backdrop for profits. With cash flow hindered by another year of elevated capex, and a muted earnings inflection, we expect shares could be rangebound until a better backdrop emerges. This is unfortunate, as we believe spot margins were set to inflect materially just as the Iran conflict started. We remain bearish ammonia longer term and expect material sulfur demand destruction should drive prices lower. However, we need the Strait of Hormuz open for this to play out, and both could have material upside over the near term given the conflict and fallout to energy infrastructure. This means margin expansion is more of a 2027 story, and thus we wait for more clarity to emerge."

For an analyst ratings summary and ratings history on Mosaic click here. For more ratings news on Mosaic click here.

Shares of Mosaic closed at $26.20 yesterday.

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