Analyst Note| Seth Goldstein, CFA |
On June 21, Nutrien announced it would increase its 2021 potash production by an additional 500,000 metric tons amid strong global fertilizer demand. This follows an announcement in early June of a 500,000-metric-ton increase, bringing 2021 production guidance up by 1 million metric tons, or roughly 7%. Management also said Nutrien's 2021 profits would exceed the high end of guidance given in the first-quarter earnings release thanks to strong fertilizer prices and demand. Having updated our model to incorporate higher potash volume, we raise our fair value estimate to $65/CAD 80 per share from $63/CAD 78. Our narrow moat rating is unchanged.