Yahoo Finance Mosaic (MOS) Hits New 52-Week High: What's Driving the Stock?
Shares of The Mosaic Company MOS scaled a fresh 52-week high of $32.77 on Sep 21, before closing the session at $32.33.
The company has a market cap of roughly $12.5 billion and average volume of shares traded in the past three months was around 3,826.1K. The company has expected long-term earnings per share (EPS) growth rate of 7%.
Mosaic’s shares have gained 15% in the past three months, outperforming the industry’s rise of 7.5%.
What’s Driving the Stock?
Strong earnings outlook, upbeat prospects from the Vale Fertilizantes buyout as well as strong demand and pricing trends for crop nutrients are contributing to the rally in Mosaic’s shares.
In August, the company raised its adjusted EPS guidance for 2018, considering strong business performance and lower expected effective tax rate for the year. For 2018, the company expects adjusted earnings in the range of $1.45-$1.80 per share, up from the previous view of $1.20-$1.60. It also expects adjusted EBITDA for 2018 in the range of $1.80-$1.95 billion, up from the prior view of $1.70-$1.90 billion.
Mosaic is gaining from higher fertilizer prices, which boosted top-line growth in the second quarter of 2018. The company’s revenues rose roughly 26% year over year to $2,205 million in the quarter. Higher average realized sales prices helped the company achieve double-digit sales growth in the Phosphates and Potash segments. The company expects to continue benefitting from higher prices in the third quarter.
Moreover, the company is strongly positioned to leverage the rising global demand for fertilizers. In particular, it is seeing strong demand for nutrients in India, a major import market. Mosaic expects market conditions to improve as well as anticipates demand for phosphate and potash to continue rising in 2018. It envisions 2018 to be another record year for global shipments of the nutrients.
Moreover, the acquisition of Vale Fertilizantes business makes Mosaic one of the leading fertilizer manufacturing and distribution companies in Brazil. The buyout has enabled the company capitalize on the rapidly growing Brazilian agricultural market. The acquisition is expected to be accretive to the company's EPS in 2018. Mosaic expects to realize around $100 million in synergies from the buyout this year.
The Mosaic Company Price and Consensus
The Mosaic Company Price and Consensus | The Mosaic Company Quote
Zacks Rank & Stocks to Consider
Mosaic currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the basic materials space are Ingevity Corporation NGVT, Steel Dynamics, Inc. STLD and Huntsman Corporation HUN, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ingevity has an expected long-term earnings growth rate of 12%. Its shares have rallied 74.6% in the past year.
Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have gained 37.6% in the past year.
Huntsman has an expected long-term earnings growth rate of 8.5%. Its shares have moved up 7% in a year.
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