Nutrien Faces Short-term Gains and Long-term Challenges Amid Supply Disruptions and Structural Headwinds: Hold Rating with $66.00 Price Target.

Jefferies analyst Laurence Alexander downgraded Nutrien to a Hold rating with a $66.00 price target, citing short-term gains from supply disruptions and long-term challenges, including potential supply shocks, margin pressures, and structural headwinds such as the shift towards precision agriculture. Alexander maintains a cautious stance, believing the equity markets may be underestimating these risks.

Jefferies analyst Laurence Alexander downgraded Nutrien (NYSE:NTR) to a Hold rating with a $66.00 price target, reflecting a cautious stance on the company's long-term prospects. The downgrade comes despite Nutrien's impressive year-to-date performance, driven by supply disruptions in the fertilizer market [1].

Nutrien's stock has delivered a 38.66% return year-to-date, trading near its 52-week high of $65.08. However, Jefferies believes that the positive earnings momentum has been discounted in the stock price, with consensus revisions likely to peak by mid-2026 [2].

Looking ahead, Jefferies anticipates market focus to shift towards supply shocks for nitrogen and potash, along with margin pressure for nitrogen due to the LNG glut and data center developments. Additionally, the firm cited potential longer-term concerns, noting that the EU's approval of genetically engineered crops could drive a 50-100 basis points ($6-$12 per share) derating of the stock due to input efficiency [2].

The analyst's concerns are not without precedent. Nutrien reported first-quarter earnings that fell short of analyst expectations, with adjusted earnings per share at $0.11 compared to the consensus estimate of $0.36. Revenue also missed the mark, coming in at $5.1 billion against the expected $5.2 billion. Despite strong potash sales volumes and increased ammonia operating rates, Nutrien's adjusted EBITDA declined 19% year-over-year to $852 million, largely due to lower potash prices in North America and weaker retail earnings [2].

While RBC Capital Markets and BofA Securities maintained their Buy ratings and raised their price targets, Raymond James downgraded Nutrien from Outperform to Market Perform, citing concerns over the sustainability of its recent performance [2].

Nutrien remains committed to its full-year 2025 guidance, anticipating retail adjusted EBITDA between $1.65 billion and $1.85 billion and potash sales volumes of 13.6 million to 14.4 million tonnes. However, the company faces significant headwinds, including structural challenges such as the shift towards precision agriculture and potential regulatory changes.

References:
[1] https://seekingalpha.com/news/4466907-nutrien-downgraded-at-jefferies-seeing-more-risks-on-the-horizon
[2] https://www.investing.com/news/analyst-ratings/jefferies-downgrades-nutrien-stock-rating-to-hold-on-longterm-concerns-93CH-4131242