NTR Shares Rise 28% YTD: How Should Investors Play the Stock?

Nutrien Ltd.’s NTR shares have gained 28.1% year to date, topping the Zacks Fertilizers industry’s rise of 18.1% and the S&P 500’s rise of 10.9%. NTR is benefiting from healthy demand for crop nutrients, its actions to reduce costs and strategic acquisitions, further supported by improving fertilizer prices.

NTR’s peers, The Mosaic Company MOS and CF Industries Holdings, Inc. CF, have gained 32.6% and lost 0.9%, respectively, over the same period.

NTR’s YTD Price Performance

Technical indicators show that NTR has been trading above its 200-day simple moving average (SMA) since April 11, 2025. However, the stock is currently trading below its 50-day SMA. Following a golden crossover on Feb. 24, 2025, the 50-day SMA is at a higher level than the 200-day SMA, suggesting a bullish trend.

Nutrien Trades Below 50-Day SMA

Is the time right to buy NTR shares for potential upside? Let’s take a look at the stock’s fundamentals.

Healthy Nutrients Demand and Acquisitions Aid NTR Stock

Nutrien is well-placed to benefit from higher demand for fertilizers, backed by the strength in global agriculture markets. It is seeing healthy fertilizer demand in its major markets. Tight inventories are expected to support crop commodity prices in 2025. Strong demand and supply tightness have also led to an uptick in fertilizer prices this year. 

Strong grower economics, improved affordability and low inventory levels are expected to drive potash demand globally. The phosphate market also benefits from higher global demand and low producer and channel inventories. Restricted exports from China have also led to supply tightness in this market. Demand for nitrogen fertilizer also remains healthy in major markets. Global nitrogen requirement is driven by demand in North America, India and Brazil. A resurgence in industrial nitrogen demand also bodes well. 

The company expects an increase in U.S. corn acreage in 2025 and sees strong demand for crop inputs. NTR’s second-quarter and first-half 2025 potash sales volumes reached record highs, driven by favorable potash affordability and robust consumption in North America and major offshore markets. It has raised potash sales volume guidance to 13.9-14.5 million tons, driven by anticipated higher global demand.

NTR should also gain from acquisitions and increased adoption of its digital platform. It continues to expand its footprint in Brazil through acquisitions. It is expected to continue pursuing targeted opportunities in its core markets. The company expects to utilize part of its free cash flow for incremental growth investments, including tuck-in acquisitions in the retail business in 2025.

Cost Reductions to Drive Nutrien’s Margins

Cost and operational efficiency initiatives are also expected to aid the company’s performance. NTR remains focused on lowering the cost of production in the potash business. The company has announced several strategic actions to reduce its controllable costs and boost free cash flow. NTR has accelerated operational efficiency and cost-saving initiatives and anticipates achieving around $200 million of total savings in 2025. The company is ahead of schedule on this cost-reduction goal.

NTR’s Solid Financial Health Bodes Well

NTR generates substantial cash flows and has a strong balance sheet, enabling it to finance its strategic growth investment, pay down debt and drive shareholder value.  At the end of the second quarter, Nutrien had cash and cash equivalents of $1,387 million, up around 38% year over year. Cash provided by operating activities surged 40% year over year to $2,538 million for the quarter, supported by higher selling prices and sales volumes.
 
Further, Nutrien returned $0.8 billion to its shareholders in the first half of 2025 through dividends and share buybacks. NTR offers a healthy dividend yield of roughly 3.9% at the current stock price. It has a payout ratio of 66%. NTR has a five-year annualized dividend growth rate of 6.6%. Backed by strong cash flows and sound financial health, the company's dividend is perceived as safe and reliable.

Reduced Operating Rates Weigh on NTR’s Nitrogen Volumes

Record ammonia operating rates drove Nutrien’s nitrogen sales volumes in the first half of 2025. However, the company expects lower ammonia operating rates in the second half. Operating rates are expected to fall to roughly 85% in the second half from around 98% in the first half. Planned turnaround activities at Nutrien’s North American plants are expected to impact operating rates. Lower operating rates are expected to weigh on the company’s nitrogen volumes in the second half.

Nutrien Exposed to Input Cost Volatility  

Nutrien uses sulfur and natural gas as key inputs. Supply disruptions from Russia amid the war with Ukraine contributed to the rise in natural gas prices. Plant shutdowns and maintenance also resulting in a tight supply of these inputs, which, coupled with strong demand, pushed up their prices. The company saw higher sulfur input costs and natural gas prices in the second quarter, leading to a higher cost of goods sold per ton in phosphate and nitrogen businesses, respectively. The company remains exposed to a volatile input cost environment amid supply tightness.

Positive Analyst Sentiment for NTR Stock

Earnings estimates for NTR have been rising over the past 60 days, reflecting analysts’ optimism. The Zacks Consensus Estimate for 2025 and 2026 has been revised upward over the same time frame.

A Look at Nutrien Stock’s Valuation

NTR is currently trading at a forward price/earnings of 13.13X, a modest 0.9% discount compared to the industry’s average of 13.01X. It is trading at a premium to Mosaic and CF Industries. Nutrien, Mosaic and CF Industries currently have a Value Score of A each.

NTR’s P/E F12M Vs. Industry, MOS & CF

Final Thoughts: Hold NTR Stock for Now

NTR presents an attractive investment case, benefiting from strong global demand for crop nutrients, thanks to the underlying strength of the agricultural market and attractive farm economics. Robust demand, improving fertilizer prices and strategic growth initiatives are expected to aid its performance. Cost-reduction initiatives are also expected to boost margins. Rising earnings estimates and a solid dividend yield are the other positives. However, near-term headwinds include lower expected nitrogen volumes from reduced operating rates, exposure to volatile input costs and supply tightness that could pressure margins. Retaining this Zacks Rank #3 (Hold) stock will be prudent for investors who already own it.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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