JPM cuts K+S to 'neutral' on limited potash price upside
03/10/2024 07:56
** J.P.Morgan cuts potash and salt miner K+S SDFGn.DE to
"neutral" from "overweight" as it sees a balanced to looser
global potash market in the medium term, limiting the upside to
potash prices
** "K+S has shifted its product mix towards higher-margin
specialty fertilizers in Europe, which supported margins, but
further price increases for premium products seem unlikely due
to stagnant farmer economics," it says
** JPM says potash prices have not benefitted from improved
demand to the extent it had expected, in part due to shipments
from Russia and Belarus returning to the global market sooner
than expected
** It expects flattish mid-term earnings for the German
group, projecting EBITDA of 563 mln euros ($621 million), 609
mln euros and 617 mln euros for 2024, 2025 and 2026 respectively
** "While the share price has already fallen 19% YTD to
reflect these trends, and the valuation is cheap, we see limited
upside to the share price from here," it adds
** Out of 21 analysts that cover K+S, six rate it "strong
buy"/"buy", nine "hold" and six "strong sell"/"sell"
($1 = 0.9065 euros)
(Reporting by Ozan Ergenay)
((ozan.ergenay@thomsonreuters.com))