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Nutrien (NTR) Up 34% in a Year: What's Driving the Stock?

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·4-min read
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Nutrien Ltd.’s NTR shares have popped 34.2% over the past year. The company has also outperformed its industry’s rise of 23.3% over the same time frame. It has also topped the S&P 500’s 23.6% rise over the same period.

Let’s dive into the factors behind this fertilizer maker’s stock price appreciation.

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Zacks Investment Research

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What’s Going in NTR’s Favor?

Nutrien, currently sporting a Zacks Rank #1 (Strong Buy), is benefiting from strong demand and higher prices for fertilizers, supported by the strength in global agriculture markets. It is expected to gain from strong sales volumes on the back of solid domestic and overseas demand.

The company, on its third-quarter call, said that it expects strong demand for crop inputs in the fourth quarter as well as tight global fertilizer supply and demand fundamentals to continue into 2022. It raised its adjusted earnings per share and adjusted EBITDA guidance to $5.85-$6.10 (from previous view of $4.6-$5.1) and $6.9-$7.1 billion (from earlier view of $6-$6.4 billion), respectively, for full-year 2021.

Nutrien is also gaining from higher net realized selling prices for crop nutrients as witnessed in the third quarter. It saw higher sales across all the segments in the quarter, driven by higher prices and strong demand.

Potash prices have strengthened on the back of robust global demand, aided by strong grower economics, higher crop prices and low global inventory levels. Tight availability along with firm demand is also driving up phosphate prices globally. Lower global supply availability stemming from reduced operating rates and a spike in energy prices have also boosted nitrogen prices. Higher prices are expected to drive the company’s sales and margins for full-year 2021.

Nutrien is also taking actions to boost potash production in the wake of tightening global potash market conditions. The move is in response to strong market fundamentals and is geared to enable its customers have the crop inputs they require to feed a growing population.

The company is also well placed to gain from acquisitions, cost efficiency, and increased adoption of its digital platform. It also continues to expand its footprint in Brazil through acquisitions.

Earnings estimates for Nutrien have also been going up over the past three months. The Zacks Consensus Estimate for 2022 has increased around 61%. The favorable estimate revisions instill investor confidence in the stock.

Stocks to Consider

Other top-ranked stocks worth considering in the basic materials space include Commercial Metals Company CMC, Albemarle Corporation ALB and AdvanSix Inc. ASIX.

Commercial Metals, sporting a Zacks Rank #1, has a projected earnings growth rate of 10.5% for the current fiscal year. The Zacks Consensus Estimate for CMC's current fiscal year earnings has been revised 6.6% upward over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 7.4%, on average. CMC has rallied around 78% in a year.

Albemarle, carrying a Zacks Rank #1, has an expected earnings growth rate of 51.3% for the current year. ALB's consensus estimate for the current year has been revised 5.4% upward over the past 60 days.

Albemarle beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 22.1%. ALB shares have popped around 30% in a year.

AdvanSix, carrying a Zacks Rank #2 (Buy), has an expected earnings growth rate of 3.9% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 2% upward in the past 60 days.

AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has rallied around 109% in a year.


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Commercial Metals Company (CMC) : Free Stock Analysis Report

AdvanSix (ASIX) : Free Stock Analysis Report

Nutrien Ltd. (NTR) : Free Stock Analysis Report

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