04 January 2008 14:23 [Source: ICIS news]
TORONTO (ICIS news)--Canada’s TD Securities has boosted its profit estimates and share price targets for fertilizer majors Agrium and Potash Corporation of Saskatchewan (PotashCorp) on much better than expected fertilizer markets and high biofuels demand, it said on Friday.
Continuing domestic and international demand was resulting in stronger pricing leverage for producers as end markets were proving less price-sensitive at current levels, TD said in a research note.
“Indeed, buyer resistance is yet to be noted and we do not expect capacity increases to take effect until at least 2009,” the analysts said.
An important factor driving fertilizer prospects was the recent 2007 US Energy Act which required “dramatic increases” in renewable fuel usage.
“We suspect such policies will gain traction among other countries and continue to provide base support for incremental yield drives, thus fuelling demand for increased fertilizer applications,” TD said.
TD raised its 2008 and 2009 earnings per share (EPS) estimates for Calgary, Alberta-basedAgrium to $3.63 from $3.33 and to $4.17 from $3.83 respectively, and boosted its share price target to $82 from $74, maintaining its buy rating for the stock.
The analysts raised their 2008 estimate for PotashCorp to $5.53 from $4.00 and introduced an EPS estimate of $6.37 for 2009.
TD boosted its share price target for Saskatoon, Saskatchewan-based PotashCorp to $137 from $91 and upgraded its rating to hold from reduce, saying it no longer viewed the shares as overvalued.
Agrium’s share price closed up 4.05%, at $74.24, on Thursday in ?xml:namespace>
($1 = €0.68)
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