Mosaic's Shares Rise 11% in 3 Months: What's Driving the Stock?

The Mosaic Company’s MOS shares have gained 10.8% over the past three months. The company has also outperformed the Zacks Fertilizers industry’s 3.9% rise over the same time frame. 

Let’s take a look into the factors that are driving MOS stock.

Healthy Demand & Cost Actions Aid MOS Stock

Mosaic is gaining from the healthy demand for phosphate and potash, high-return investments and actions to improve its cost structure. It is seeing strong demand for phosphate and potash, aided by favorable agricultural conditions. Attractive farm economics is driving demand for fertilizers globally. Farmer economics remain favorable in most global growing regions due to strong crop demand and affordable inputs.

Demand for grains and oilseeds remains high globally. Improved farmer affordability is also likely to continue to drive demand for fertilizers. Improved crop prices have also incentivized fertilizer application by growers. In North America, strong yields and growers’ need to replenish soil nutrients have ushered in a favorable environment. Demand in Brazil is also expected to be driven by healthy grower economics and low levels of inventories. Low inventory levels and pent-up purchases are also expected to drive demand in India.

MOS is taking actions to reduce costs amid a still-challenging operating environment. Its actions to improve its operating cost structure through transformation plans are expected to boost profitability. MOS remains on track with its cost-reduction plan, which is expected to drive $150 million in run-rate cost reductions by the end of 2025.

Mosaic also remains committed to carrying out investments with high returns with moderate capital expenditures. It has completed the 800,000-ton MicroEssentials capacity conversions with volumes expected to rise 25% in 2025. The Esterhazy Hydrofloat project, which will add 400,000 tons in milling capacity, is expected to be completed by the middle of 2025, followed by a ramp-up by the end of the year. The construction of a new blending and distribution center in Palmeirante, Brazil is also expected to be completed by mid-2025. The facility is expected to enable Mosaic Fertilizantes to increase overall sales by one million tons.

The Mosaic Company Price and Consensus

The Mosaic Company price-consensus-chart | The Mosaic Company Quote

MOS’ Zacks Rank & Other Key Picks

MOS currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the Basic Materials space are Axalta Coating Systems Ltd. AXTA, Ingevity Corporation NGVT and Carpenter Technology Corporation CRS. While AXTA and NGVT sport a Zacks Rank #1 (Strong Buy), CRS carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Axalta Coating’s 2025 earnings is pegged at $2.54, indicating a rise of 12.5% from year-ago levels. AXTA beat the consensus estimate in each of the trailing four quarters. In this time frame, it has delivered an earnings surprise of roughly 16.3%, on average. 

The Zacks Consensus Estimate for Ingevity’s 2025 earnings is pegged at $4.45, indicating a rise of 26.8% from year-ago levels. The consensus estimate for NGVT’s 2025 earnings has increased by 29% in the past 60 days. 

The consensus estimate for Carpenter Technology for the current fiscal year stands at $6.95, reflecting a 46.6% year-over-year increase. CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 15.7%. 

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This article originally published on Zacks Investment Research (zacks.com).

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