RBC raises PotashCorp targets on new China deals

17 April 2008 14:29  [Source: ICIS news]

TORONTO (ICIS news)--Canada’s RBC Capital Markets has raised its share price target and earnings estimates for fertilizer major PotashCorp following a $400/tonne (€252/tonne) price increase in the 2008 potash supply contract with China, it said on Thursday.

 

The bank raised its share price target for Saskatchewan-based PotashCorp to $300, from $250, and boosted its earnings per share (EPS) estimates to $9.52 in 2008 and $15.02 in 2009, up from $7.51 and $11.15, respectively.

 

Potash’s shares soared 7.5% to close at $198.26 on Wednesday in New York.

 

The analysts said their upgraded outlook for PotashCorp reflected realised potash price assumptions of $400/tonne and $600/tonne for 2008 and 2009, respectively, up from $340 and $495.

 

The 2009 potash price forecast was based on the "very conservative” assumption that spot potash prices stabilise at about $700/tonne and no further increases occur in China and India, RBC said.

 

Some industry participants suggested that spot potash prices could reach $1,000/tonne delivered and $900/tonne realised by the end of 2008, the analysts added.

By: Stefan Baumgarten
+1 713 525 2653

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