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On Thursday, Nutrien (NYSE:NTR) held its investor day, where the company confirmed planned expansions to its potash and nitrogen production. Following the event, BofA analyst Daniel Lungo told investors in a note that while they have some concerns, Nutrien’s trading levels are attractive.
Nutrien, a fertilizer company, expects to increase potash production by ~3 million tons per annum (mmta) and increase nitrogen production by 500k tons per year by the end of 2025. In addition, it announced an additional $2b in share repurchases in 2022.
Lungo wrote that while the firm has some concerns regarding the liquidity of NTRCN’s notes, they “believe that market fundamentals and trading levels are too attractive to ignore” and therefore maintained an Overweight rating on the stock.
Elsewhere, Mizuho analyst Christopher Parkinson said in a note to clients that there were four primary factors to highlight following the investor day.
These include the company’s positioning to ramp capacity to 18mmts through ’25, several updates to long-term EBITDA potential, including a $9.2 billion mid-cycle scenario, a building focus on low-CO2 NH3 facilities, and ample free cash flow optionality.
However, the analyst concluded: “As much as we appreciate the Retail updates (core to bull thesis), there doesn’t appear to be much ‘new’ (product differentiation + M&A).”
Mizuho maintained a Neutral rating and a $128 price target on Nutrien.
