Sept 21 (Reuters) - Shares of Potash Corp of Saskatchewan POT.N POT.TO fell 5 percent in premarket trade on the New York Stock Exchange, following an outlook cut by the world’s largest fertilizer producer and a downgrade by a brokerage.
Soleil Research analyst Mark Gulley downgraded both Potash and smaller rival Mosaic Co (MOS.N) to “hold” from “buy” based on valuation, and cut the price targets on both companies based on their lower sales and earnings per share estimates.
In addition, RBC Capital Markets lowered its price target on the stock to $110 from $115, but said it believes long-term fundamentals driven by the constant need to improve food production will eventually outweigh current market challenges.
“Given Potash Corp’s latest revision to its 2009 EPS guidance and updated outlook for 2010 potash demand, we expect its share price to face some downward pressure in the near term,” RBC analyst Fai Lee wrote in a note to clients.
Potash Corp lowered its outlook last week, saying it expects full-year earnings to be between $3.25 and $3.75 a share, down from its previous expectation of $4 to $5 a share, citing weak sales. [ID:nN18272693]
Potash shares were at $92.70 before the bell Monday on the New York Stock Exchange, down from Friday’s close of $97.14.
Mosaic shares were down nearly 4 percent while those of rival Agrium Inc AGU.TO AGU.N were down 3 percent, both on the New York Stock Exchange. (Reporting by Isheeta Sanghi in Bangalore; Editing by Mike Miller)