Nutrien Q4 Profit Rises Nearly 4x, Dividend Raised

Shares of Nutrien (TSE: NTR) (NYSE: NTR) rose Thursday morning after the world’s largest provider of crop inputs, services and solutions delivered strong year-end results.

Fourth-quarter profit jumped nearly fourfold due to increased demand for potash and other crop fertilizers.

Sales & Earnings

Sales came in at $7.27 billion in Q4 2021, an increase of 79% from $4.05 billion in Q4 2020.

Net earnings were $1.2 billion ($2.11 per share), for the three months ended December 31, compared with $316 million ($0.55 per share) a year earlier.

On an adjusted basis, the company reported earnings of $2.47 per share, up 929% from $0.24 per share in Q4 2020.

Nutrien expects adjusted annual earnings between $10.20 and $11.80 per share.

The company declared a quarterly dividend of $0.48 per share, a 4% increase from a year earlier, and announced a stock buyback of up to 10% of its public float.

CEO Commentary

Nutrien interim president and CEO Ken Seitz said, “The advantages of Nutrien’s integrated business were demonstrated in 2021 as we delivered record financial results and made significant progress on our long-term strategic targets, including our key sustainability priorities. We utilized the scale and reliability of our world-class supply chain and the strong execution of our teams to ensure customers had the products and services they needed, when they needed them.”

Seitz added that the outlook for the global agriculture and agri-input markets is very strong and the company is well positioned to generate significant growth in earnings and free cash flow in 2022.

Wall Street’s Take

On February 15, Mizuho analyst Christopher Parkinson kept a Hold rating on NTR and raised its price target on Nutrien to $87 (C$110.45). This implies 11.9% upside potential.

Parkinson said in a research note that despite the stock market volatility, he remains constructive on the fertilizer industry. The inflationary landscape is problematic, but price moves in the second half of 2021 should offset those pressures.

The rest of the Street is cautiously optimistic about NTR, with a Moderate Buy consensus rating based on seven Buys and three Holds. The average Nutrien price target of C$102.16 implies 3.5% upside potential to current levels. 

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