- Shares of Potash Corp. jumped on Thursday, after a Goldman Sachs analyst upgraded the fertilizer company's stock on higher potash prices. The stock advanced $6.59, or 4.6 percent, to $150 in early morning trading and set an all-time high of $150.26 earlier in the session.
- Goldman Sachs analyst Edlain Rodriguez upgraded the stock to "Buy" from "Neutral" and said Potash will be able to raise prices because of strong demand and tight supply. Rodriguez noted that Potash shares have risen sharply recently, but still thinks they have further to climb.
- "Despite the strong run-up in the stock, we believe there is further upside potential, based on the constant upward earnings revisions that will likely continue in the near-term because of Potash's ability to raise prices due to strong demand and tight supply," Rodriguez wrote in a client note.
- Rodriguez's new price target is $180, from $122 previously, which implies upside of 25.5 percent to Wednesday's $143.41 closing price.
I still love this space for the long run, but the recent run ups have been enormous off of November lows, and the more analysts start to love the stocks the more I get wary. I prefer it when analysts underestimate the estimates, allowing the companies to beat the numbers and raise guidance and continue that pattern. I've seen a lot of fertilizer bandwagon jumping in the past few weeks. While I think justified, the ride is starting to get full. I've cut back my fertilizer exposure to the lowest its been in quite a few months, and at this point am hoping for some pullbacks to add more. In fact I have taken a bit more off the table this morning as the stock is up over 45% in a month. The stocks seem quite extended to me at this point; but again going out 1-2 years I still think there is a long way to go.
Long Potash in fund; no personal position
