Shares of Nutrien (NYSE:NTR) declined more than 4% on Wednesday’s extended trade after the company reported lower-than-expected first-quarter results. The quarterly performance was impacted by lower realized prices and a drop in Retail, Potash, and Phosphate sales volumes.
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The fertilizer company produces and distributes potash, nitrogen, and phosphate products for agricultural, industrial, and feed manufacturers.
Nutrien’s Q1 sales decreased 20% year-over-year to $6.1 billion, while adjusted EPS dropped 59% to $1.11. Also, the company missed analysts’ EPS estimates of $1.48 and revenue expectations of $6.4 billion.
The decline can be attributed to tough comparisons from last year, when prices soared due to the invasion of Ukraine. The business also noticed low demand as farmers held off on purchases in anticipation of a further price decline.
Outlook
Nutrien anticipates global potash demand growth in the second half of 2023 due to lower inventories and improved farmer affordability. Also, the company expects potash shipments from Belarus to remain above its prior estimates, partly offset by lower expected exports from Russia. In comparison to 2021, the revised 2023 estimates for Belarusian and Russian shipments both show decreases of 25% to 40% and 25% to 35%, respectively.
Also, Chinese phosphate exports may moderately increase year-over-year due to the expected easing of government restrictions.
Based on these factors, Nutrien lowered its full-year adjusted EPS guidance to the range of $5.50 to $7.50 from the previous outlook range of $8.45 to $10.65.
Is NTR Stock a Buy?
The Moderate Buy consensus rating for Nutrien is based on nine Buys, six Holds, and one Sell. The average NTR stock price target of $89.53 suggests 41.3% upside potential. The stock is down about 11% so far in 2023.
As per TipRanks data, the most accurate analyst for NTR stock over a one-year time frame is Andrew Wong, CFA, of RBC Capital. The analyst has had a 61% success rate in his ratings of the stock, with an average return of 19.88% per trade.
