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Shares of 3 fertilizer companies skyrocketed after the conflict in Ukraine

Geopolitical changes impact the fertilizer industry

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Illustration: Stockmarket

Before 2022, the fertilizer industry was in a difficult situation. The cost of natural gas used to make fertilizer has skyrocketed, new export licensing requirements, and severe hurricanes in the US have completely disrupted the industry, slashing profit margins. farmers and caused fertilizer prices to skyrocket.

Things got worse when the Ukraine-Russia conflict broke out. Shipping companies did not dock in Russia – the world’s largest fertilizer producer – to collect fertilizer. According to farmers, alternative sources are very expensive, causing the supply of products to be cut.

Against this backdrop, it’s not surprising that fertilizer stock prices have skyrocketed.

Sociedad Quimica y Minera de Chile (SQM)

SQM is a fertilizer and iodine producer, distributing its products to more than 60 countries worldwide.

So far, SQM stock is up nearly 66%, while the S&P 500 is down 4.5%.

SQM stock has also performed amazingly strong last year, up 64% from the S&P 500’s 16% return. In the end, SQM stock dominated the S&P 500’s 4% month-over-month return. before a 27% increase in value.

Analysts have noted this uptrend and have revised their estimates over the past 60 days, lifting SQM’s full-year profit 26% to $4.65 per share and estimating EPS (earnings after tax). shares) next year is 22% to $4.16/share.

SQM stock in the following and subsequent quarters also saw a notable increase in consensus estimates, rising 32% to $1.05 per share and 15% to $1.06 per share, respectively.

Nutrien Co

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Shares of fertilizer companies rose sharply. Photo: thestar

Nutrien manufactures and sells fertilizers and other related industrial feed products. The company is headquartered in Saskatoon, Canada.

Nutrien stock has been a bright spot in a lackluster market so far this year, up nearly 45 percent in value and outperforming the S&P 500 index. Last year’s returns were even more impressive as Nutrien stock rallied nearly as 100% in value and outperforming the performance of the general market. The stock’s performance last month was similar, with a 25% increase in value.

Over the past 60 days, Nutrien’s current year consensus estimate trend has increased 37% to $12.86 per share and next year’s EPS estimate has increased 81% to $10.37 per share. EPS estimates for the next and subsequent quarters have also increased sharply, growing 4% to $2.54 per share and 11% to $4.44 per share in the following quarter.

Andersons Co

The Andersons Company is a regional grain trader with diversified agribusiness activities.

Like SQM and Nutrien, Andersons stock has been a hot commodity in the market since the beginning of the year, increasing by 41% in value and easily outperforming the general market. Last year’s performance was solid, with the stock up nearly 93%. Compared to the previous month, the stock continued to demonstrate strength as it increased by 20% in value.

Most notably, the consensus estimate trend for the company increased by nearly 61% the following quarter, bringing the quarterly estimate to $0.66 per share from $0.41 per share. According to a downward revision of estimates, next quarter’s EPS fell 8% to $0.88 per share and current year earnings estimates rose 15% to $2.63 per share.

Stocks of all three companies are rated #1 (Strong Buy).

However, it’s important to remember that trends are changing rapidly and what worked for investors a month ago may not work now.

Due to current conditions and trends, experts believe that all three companies present excellent opportunities for investors who are looking for a profit.

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