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Stock Strategist

PotashCorp's Wide Moat Intact

The company will benefit as its expanded potash capacity is eventually filled.

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We're holding steady on our U.S. dollar-denominated fair value estimate of $41 per share for  Potash Corporation of Saskatchewan (POT) following the release of first-quarter results. Our Canadian dollar-denominated fair value estimate falls to CAD 50 per share from CAD 52 on movement in the Canadian/U.S. dollar exchange rate. Our wide economic moat rating based on cost advantage remains intact. We think the shares look undervalued.

Potash volume advanced marginally in the first quarter, up 1.6% from the first quarter of 2014. This was an encouraging result, given weakness in PotashCorp's important North American market caused by a late start to the spring planting season and above-normal offshore imports to the continent.

Jeffrey Stafford does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.