NTR's $200M Cost-Saving Drive: Can Expense Cuts Unlock Margin Upside?

Nutrien Ltd.’s NTR remains focused on executing its cost-reduction program, one of its strategic priorities aimed at boosting margins and improving efficiency and competitiveness. It 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 in total savings this year. Nutrien is ahead of schedule on this cost-reduction goal. Around half of the savings are expected to be realized from NTR’s Retail unit, with the balance coming from a reduction in selling, general and administrative expenses (SG&A). 

The initiative is aimed at sustainably reducing per-unit costs across operations. It involves several measures, including rationalization activities in Brazil, closures of underperforming locations in North America, and consolidation and optimization in Australia. This is particularly important in an industry characterized by input cost pressure and volatile fertilizer prices. The cost initiatives resulted in a 5% year-over-year reduction in SG&A in the first half of 2025. 

A successful execution of the cost-saving program would expand EBITDA margins, drive incremental free cash flow and bolster returns to shareholders. Investors will be watching closely if Nutrien delivers on its savings targets, which would not only result in stronger margins but also offer a clearer path to long-term value creation.

Among its peers, The Mosaic Company MOS is implementing measures to enhance its operating cost structure through transformation plans that are expected to improve profitability. Mosaic is on track with its cost-reduction plan, which is now expected to drive $250 million in run-rate cost reductions by the end of 2026, having already achieved $150 million in cost reduction targets set two years ago. MOS achieved $161 million in cost savings as of June 30, 2025, with $106 million being realized within the Mosaic Fertilizantes segment and $55 million from SG&A reductions. 

Another fertilizer heavyweight, CF Industries Holdings, Inc. CF, saw higher natural gas costs and SG&A expenses in the second quarter. The average cost of natural gas increased to $3.36 per MMBtu (million metric British thermal unit) in the second quarter from $1.9 per MMBtu a year ago. CF Industries’ SG&A expenses climbed around 33% year over year in the quarter, partly due to costs associated with the Blue Point joint venture. CF Industries expects SG&A in the third and fourth quarters to be more similar to the first quarter of 2025, which indicates a reduction.

NTR’s Price Performance, Valuation & Estimates

Nutrien has gained 30% year to date compared with the Zacks Fertilizers industry’s rise of 25.2%.

From a valuation standpoint, NTR is currently trading at a forward 12-month earnings multiple of 12.88, a 5.4% discount to the industry average of 13.62X. It carries a Value Score of A.

The Zacks Consensus Estimate for NTR’s 2025 and 2026 earnings implies a year-over-year rise of 29.4% and 0.9%, respectively. The EPS estimates for 2025 and 2026 have been trending higher over the past 60 days.

NTR stock currently carries a Zacks Rank #3 (Hold). 

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

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