By Leia Michele Toovey- Exclusive to Potash Investing News
It has been relatively quiet on the fertilizer market, since the dust settled over BHP Billiton’s (NYSE:BHP) hostile bid for Potash Corporation of Saskatchewan (NYSE:POT). While some analysts expressed concern that a blocked-bid could spell disaster for the potash producer, and the potash market; in the aftermath, Potash Corp and many other producers have enjoyed a steady ascent of stock prices despite overall volatility in the markets.
Three top fertilizer producers, with exposure to potash, phosphate and nitrogen, were upgraded over this past week. In a research note to clients and investors on Friday, Swiss-based UBS (NYSE: UBS) raised their earnings per share estimates on shares of Potash Corp through 2012 with a price target of $165.00 and a “buy” rating. UBS analysts proclaimed their bullishness over Agrium (NYSE:AGU) by boosting their price target to $100, an astounding 20 percent upside compared to the stock’s current price. UBS also boosted its earnings estimates for the company and maintained its “Buy” rating, noting Agrium should benefit from higher prices.
Equities research analysts at Goldman Sachs (NYSE: GS) also issued an upgrade. They boosted their earnings per shares estimates on CF Industries Holdings Inc. (NYSE: CF) through 2013 in a research note to clients and investors, with a price target of $155 and a “buy” rating. CF is a manufacturer and distributor of nitrogen and phosphate fertilizer products in North America.
Europe’s largest potash supplier K+S AG, announced this week that it has met its profit goals for this year and forecasts that earnings in 2011 will increase “significantly.” The Kassel, Germany based company is currently evaluating the viability of reopening mines to replace exhausted deposits. K+S is undergoing talks with the local government owners of the Rossleben mine and may carry out a feasibility study on the Siegfried-Giesen site.
Russia’s largest phosphate fertilizer producer, OAO PhosAgro, applied for a loan from OAO Sberbank to finance a possible acquisition of Potash Corp. of Saskatchewan Inc. It will be some time, although, before Phosagro will approach Potash Corp. The fertilizer producer said that does not expect to buy a stake in Potash Corp (within the next 12 months, but is under considerably less pressure since BHP Billiton announced that it would not make another offer after the Canadian Government blocked the first bid on that grounds that it did not provide a “net benefit” to Canada. “It is probably fair to say that in the next 12 months there will be no sharp movement on this,” Phosagro CEO Maxim Volkov told reporters on Tuesday. Mr. Volkov added that Phosagro is also continuing its preparations for an initial public offering (IPO) and is planning to issue Eurobonds.
Allana Potash Corp. (CVE:AAA) announced positive results from two drill holes located in an area of their Ethiopian Potash Project that is until now, unexplored. Drill hole DK-10-06, located in the southwestern center of the evaporite basin, intersected two significant zones of potash mineralization. Hole DK-10-06 intersected 30.9% KCl over 3 meters, and 24.5% KCl over 4.2 meters in two distinct intersections at relatively shallow depths beginning at 495 meters. The lower interval occurs within a thick potash sequence that returned 17.3% KCl over 17.7 meters. Commenting on the discovery, Farhad Abasov, President and CEO, commented: “We are very pleased to have identified two robust zones of potash mineralization in hole DK-10-06 in a part of the evaporite basin that has no past exploration. We believe that this hole further demonstrates that Allana’s potash project has the potential to become a significant potash deposit. Each drill hole from our basin-center program has the potential to substantially expand our current inferred resource. Now that the seismic program is completed, we are awaiting the seismic interpretation that will assist us in determining the potential in our project.”
Hole DK-10-06 area was not previously explored by Parsons and the potash zones remain open in all directions. Allana believes that the potash mineralization intersected in DK-10-06 represents potential for a significant expansion of Allana’s potash resource.